MIR-3.1.1

Members must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in a member and be registered with the SRO, as the case may be, prior to their final appointment.

MIR-3.1.2

Controlled functions are those functions occupied by board members and persons in executive positions and include:

MIR-3.1.2A

For the purpose of this Module, the following positions are considered as head of function:

MIR-3.1.2B

Whether a person is a head of function will depend on the nature, scale and complexity of the function and is not determined by the presence or absence of the word in their job title.

MIR-3.1.3

The licensed member must maintain adequate segregation of responsibilities in their staffing arrangements, to protect against the misuse of systems or errors. The segregation of responsibilities must also ensure avoidance of any conflict of interest and maintain a Chinese Wall between such critical controlled functions.

Fit and Proper Requirements

MIR-3.2.1

As part of the licensing approval process, applicants must demonstrate in their business plan (together with any supporting documentation) what risks their business would be subject to and how they would manage those risks. Applicants may also be asked to provide an independent assessment of the appropriateness of their systems and controls to the CBB.

MIR-3.2.2

The Chief Executive Officer or General Manager, Registered Representative, Compliance Officer and Money Laundering Reporting Officer must be resident in Bahrain.

MIR-3.3.1

Members seeking an approved person authorisation for an individual, must satisfy the CBB that the individual concerned is 'fit and proper' to undertake the controlled function in question.

MIR-3.3.1A

Each applicant applying for approved person status and those individuals occupying approved person positions must comply with the following conditions:

MIR-3.3.1B

In assessing the conditions prescribed in Rule MIR-3.3.1A, the CBB will take into account the criteria contained in Paragraph MAE-3.3.1C. The CBB reviews each application on a case-by-case basis, taking into account all relevant circumstances. A person may be considered 'fit and proper' to undertake one type of controlled function but not another, depending on the function's job size and required levels of experience and expertise. Similarly, a person approved to undertake a controlled function in one member may not be considered to have sufficient expertise and experience to undertake nominally the same controlled function but in a much bigger member.

MIR-3.3.1C

In assessing a person's fitness and propriety, the CBB will also consider previous professional and personal conduct (in Bahrain or elsewhere) including, but not limited to, the following:

MIR-3.3.1 D

With respect to Paragraph MIR-3.3.1C, the CBB will take into account the length of time since any such event occurred, as well as the seriousness of the matter in question.

MIR-3.3.2

Approved persons undertaking a controlled function must act prudently, and with honesty, integrity, care, skill and due diligence in the performance of their duties. They must avoid any conflict of interest arising whilst undertaking a controlled function and shall be subject, among all accepted market conducts, to the insider trading rules.

MIR-3.3.3

In determining where there may be a conflict of interest arising, factors that may be considered will include whether:

General Guidance on 'Fit and Proper'

MIR-3.4.1

[This Paragraph was deleted in April 2016.]

Prior Approval Requirements and Process

Contents:

Assessment of Application

Contents:

Appeal Process

Notification Requirements and Process

Contents:

MIR-3.5.1

A licensed member must seek prior CBB approval before an approved person may move from one controlled function to another within the same member.

MIR-3.5.2

In such instances, a new application should be completed and submitted to the CBB. Note that a person may be considered 'fit and proper' for one controlled function, but not for another, if for instance the new role requires a different set of skills and experience. Where an approved person is moving to a controlled function in another member, the first member should notify the CBB of that persons departure, and the new member should submit a request for approval under section MIR-3.1.

MIR-3.6.1

Where the CBB is satisfied that an approved person:

the CBB may if it thinks it is necessary in the interests of or for the protection of investors, by notice in writing direct that a member remove the officer from his office or employment, and that member shall comply with such notice.

MIR-3.6.2

Without prejudice to any other matter that the CBB may consider relevant, the CBB may in determining whether an officer of a member has failed to discharge the duties or functions of his office or employment for the purposes of paragraph MIR-3.6.1 (c), have regard to such criteria as the CBB may prescribe or specify in directions issued by notice in writing, after consultation with the licensed exchange and/or licensed clearing house, as the case may be.

MIR-3.6.3

Subject to paragraph MIR-3.6.4, the CBB shall not direct a member to remove an officer from his office or employment without giving the member an opportunity to be heard.

MIR-3.6.4

The CBB may direct a member to remove an officer from his office or employment under paragraph MIR-3.6.1 on any of the following grounds, without giving the member or that particular person an opportunity to be heard:

MIR-3.7.1

The CBB may, in determining whether approved persons have taken reasonable steps to discharge their duties, have regard to whether or not the approved person: