CSD-1.5 CSD-1.5 Power to Stop Commencement or Order Cessation
CSD-1.5.1
The CBB may order a
person who has applied under rule CSD-1.1.1 not to establish or commence operation of a clearing or depository facility if:(a) Theperson did not furnish the CBB with such information or documents as required under rule CSD-1.2.3 of this Module;(b) Any information or document provided by theperson to the CBB is or proves to be false or misleading; or(c) The CBB is of the opinion that it is in the interests of the capital market or financial sector.CSD-1.5.2
The CBB may, by notice in writing, order a
licensed clearing house orcentral depository to cease operating its clearing or depository facility if:(a) It has contravened any provision of the CBB Law, or any other law or rule in the course of operating its clearing facility;(b) It has not complied with any of the licensing requirements contained in this Module;(c) It provided any information or document to the CBB that is false or misleading;(d) In the opinion of the CBB, it is operating the clearing or depository facility in a manner that is likely to pose systemic risk to the financial system of Bahrain;(e) It is in the course of being wound up or otherwise dissolved, whether in Bahrain or elsewhere;(f) A receiver, a receiver and manager, or an equivalentperson has been appointed, whether in Bahrain or elsewhere, in relation to or in respect of anyproperty of thelicensed clearing house orcentral depository ;(g) It has been convicted, whether in Bahrain or elsewhere, of an offence involving fraud or dishonesty, or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or(h) The CBB is of the opinion that it is in the interests of the public to do so.CSD-1.5.3
The CBB shall give notice in the Official Gazette of any order made under rule CSD-1.5.2.
CSD-1.5.4
Subject to CSD-1.5.5, the CBB shall not make an order under rule CSD-1.5.1 or rule CSD-1.5.2 without giving the
person an opportunity to be heard.CSD-1.5.5
The CBB may order a
person not to establish or commence operation of a clearing or central depository facility under rule CSD-1.5.1, or to cease operating its clearing or central depository facility under rule CSD-1.5.2 on any of the following grounds without giving theperson an opportunity to be heard:(a) Theperson is in the course of being wound up or otherwise dissolved, whether in Bahrain or elsewhere;(b) A receiver, a receiver and manager, or an equivalentperson has been appointed, whether in Bahrain or elsewhere, in relation to or in respect of anyproperty of theperson ;(c) Theperson has been convicted, whether in Bahrain or elsewhere, of an offence involving fraud or dishonesty, or the conviction for which involved a finding that it had acted fraudulently or dishonestly.CSD-1.5.6
The CBB may direct, by notice in writing, a
licensed clearing house orlicensed central depository , to whom an order to cease operations of its clearing facility has been made by the CBB under rule CSD-1.5.2, to take such action as it considers necessary, including any of the following actions:(a) Ordering the liquidation of allpositions or part thereof, or the reduction in suchpositions ;(b) Altering conditions ofdelivery of transactionscleared orsettled, or to becleared orsettled through the clearing or depository facility;(c) Fixing thesettlement price at which transactions are to be liquidated;(d) Requiring margins or additional margins for transactionscleared orsettled or to becleared orsettled through the clearing or depository facility;(e) Modifying or suspending any of thebusiness rules of thelicensed clearing house orlicensed central depository ; or(f) Transferring the rights and obligations of thatlicensed clearing house orlicensed central depository to anotherlicensed clearing house andlicensed central depository ; andthe
licensed clearing house orlicensed central depository shall comply with that direction.Amended: April 2016CSD-1.5.7
The CBB may modify any action taken by a
licensed clearing house orlicensed central depository , including the setting aside of that action.Amended: April 2016CSD-1.5.8
Any order made under rule CSD-1.5.2 shall not operate so as to:
(a) Avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by theperson , whether the agreement, transaction or arrangement was entered into before or after the order of the cessation; or(b) Affect any right, obligation or liability arising under such agreement, transaction or arrangement.
