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  • MIR-4 MIR-4 Business Standards and Ongoing Obligations

    • MIR-4.1 MIR-4.1 General Obligations

      • MIR-4.1.1

        A member shall, in respect of every regulated activity it undertakes:

        (a) Ensure that the regulated activities are undertaken in a fair, orderly and transparent manner;
        (b) Manage any risks associated with its business and operations prudently;
        (c) Not act contrary to the interests of its clients and the public investors;
        (d) Comply with the business rules of an SRO and, where appropriate, listing rules and clearing, settlement, depository rules of the licensed exchange and/or licensed clearing house, as the case may be, that make satisfactory provision for:
        1. A fair, orderly and transparent market in securities and futures contracts that are traded through the licensed exchange and/or licensed clearing house; and
        2. The proper internal regulation and controls, and the supervision of its employees and/or representatives;
        (e) Maintain proper arrangements to enforce compliance with the business rules of an SRO, listing rules, and/or clearing, settlement and central depository rules of the licensed exchange and/or licensed clearing house, as the case may be;
        (f) Have sufficient financial and human resources and back-up systems:
        1. To maintain a fair, orderly and transparent market;
        2. To establish and maintain proper segregation between the controlled functions;
        3. To meet the requirement for handling, managing and maintaining the clients' assets safely and properly;
        4. To meet contingencies or disasters; and
        5. To provide adequate security arrangements;
        (g) Ensure that it appoints or employs fit and proper persons as approved persons to perform any controlled function;
        (h) Use or arrange to use a well-designed Business Continuity Plan and Disaster Recovery Procedure;
        (i) Ensure that all its employees or representatives are provided with the required education, qualifications and experience and they fully understand the rules and regulations of the CBB, and relevant SROs;
        (j) Ensure that its clients receive fair treatment without any unjustifiable favour or discrimination for each class of clients;
        (k) Ensure that there is sufficient and appropriate records, books and systems in place to record all transactions traded, cleared and settled through its system and maintain an audit trail;
        (l) Have an operating manual and internal policies;
        (m) Provide to the CBB, for its review and comment, at least 5 business days prior to publishing in the press, the draft agenda for any shareholders' meetings referred to in Paragraph MIR-4.1.1 (o);
        (n) Ensure that any agenda items to be discussed or presented during the course of meetings which requires the CBB's prior approval, have received the necessary approval, prior to the meeting taking place;
        (o) Invite a representative of the CBB to attend any shareholders' meeting (i.e. ordinary and extraordinary general assembly) taking place. The invitation must be provided to the CBB at least 5 business days prior to the meeting taking place; and
        (p) Within one month of any shareholders' meetings referred to in Paragraph MIR-4.1.1(o), provide to the CBB a copy of the minutes of the meeting.
        Amended: July 2016
        Amended: April 2013
        Adopted January 2010

      • MIR-4.1.1A

        Licensed members must ensure that all regulated financial services are provided without any discrimination based on gender, nationality, origin, language, faith, religion, physical ability or social standing.

        Added: October 2020

    • MIR-4.2 MIR-4.2 Notification Requirements

      • MIR-4.2.1

        A licensed member shall, as soon as practicable after the occurrence of any of the following circumstances, notify the CBB of the circumstance:

        (a) Any material change to the information in its application under rule MIR-2.2.10;
        (b) The carrying on of any business other than:
        1. The business of undertaking a regulated activity;
        2. A business incidental to undertaking a regulated activity;
        (c) The acquisition of a substantial shareholding in a corporation which does not carry on:
        1. The business of undertaking a regulated activity, whether in Bahrain or elsewhere;
        2. A business incidental to undertaking a regulated activity, whether in Bahrain or elsewhere;
        3. Such business or class of businesses as the CBB may allow;
        (d) It becoming aware of a financial irregularity or other matter which in its opinion:
        1. May affect its ability to discharge its financial obligations towards its clients; or
        2. May affect the ability to meet its financial obligations to an SRO, as the case may be;
        3. May affect its ability to meet the minimum working capital requirement;
        (e) Where it reprimands, suspends, dismisses or otherwise takes disciplinary action against any persons performing controlled functions or where such persons are subject to an order or petition of bankruptcy or criminal prosecution;
        (f) Any civil or criminal legal proceeding taken against the member or any person performing a controlled function, whether in Bahrain or elsewhere;
        (g) Any disciplinary action against the member or any person performing a controlled function taken by any regulatory body, whether in Bahrain or elsewhere, other than the CBB;
        (h) Any significant change to the regulatory requirements imposed by any regulatory body other than the CBB, whether in Bahrain or elsewhere;
        (i) Any arrangements or involvement related to take-overs, mergers or acquisitions;
        (j) Involvement or possible involvement of any of its clients in insider transactions or dealings;
        (k) Failure of any of its clients to comply with the disclosure standards requirements and adhering to the ownership rules in particular;
        (l) A failure to adhere to the trading days, hours or sessions and settlement period of an SRO, as the case may be;
        (m) Any other matter that is required to be notified, that the CBB or SRO may specify by notice in writing.
        Amended: April 2013
        Adopted January 2010

      • MIR-4.2.2

        The CBB may, at any time after receiving a notification referred to in rule MIR-4.2.1 and after providing the licensed member with an opportunity to be heard, issue directions to the relevant SRO, and/or such member:

        (a) Where the notification relates to a matter referred to in rule MIR-4.2.1 (b):
        1. To cease carrying on the first-mentioned business referred to in rule MIR-4.2.1 (b); or
        2. To carry on such business referred to in rule MIR-4.2.1 (b) subject to such conditions or restrictions as the CBB may impose; or
        (b) Where the notification relates to a matter referred to in rule MIR-4.2.1 (c):
        1. To dispose of the shareholding referred to in rule MIR-4.2.1 (c); or
        2. To exercise its rights relating to such shareholding subject to such conditions or restrictions as the CBB may impose;

        and the member shall comply with such directions.

        Amended: April 2013
        Adopted January 2010

      • MIR-4.2.3

        Where a circumstance referred to in rule MIR-4.2.1 has occurred, the member shall, in addition to the notification required under rule MIR-4.2.1, within 5 calendar days of the occurrence of the circumstance, submit a report to the CBB of the circumstances relating to the occurrence, the remedial actions taken or required to be taken at the time of the occurrence, and the subsequent follow-up actions that the member has taken or intends to take, whether as per CBB or SRO requirements.

        Amended: July 2016
        Adopted January 2010

      • MIR-4.2.4

        A member shall, within a reasonable period of time prior to entering into negotiations to provide trading, or clearing arrangement with the person establishing or operating an overseas market or clearing facility, notify the CBB of such intent to enter into negotiations.

        Adopted January 2010

    • MIR-4.3 MIR-4.3 Mind and Management

      • MIR-4.3.1

        Members with their Registered Office in the Kingdom of Bahrain must maintain their Head Office in the Kingdom.

        Adopted January 2010

      • MIR-4.3.2

        In assessing the location of a member's Head Office, the CBB will take into account the residency of its persons performing controlled functions. The CBB may require the majority of key decision-makers in executive management to be resident in Bahrain.

        Adopted January 2010

      • MIR-4.3.3

        [This Paragraph was deleted in July 2016].

        Deleted: July 2016
        Amended: April 2013
        Adopted January 2010

    • MIR-4.4 MIR-4.4 Financial Resources, Initial Paid-up Capital and Capital Adequacy Requirements

      • MIR-4.4.1

        In order to maintain market integrity and meet all risks associated with its business, the SRO is responsible for establishing the minimum required initial paid-up capital, ongoing capital adequacy requirements and other financial resources of its members, which requirements shall be a part of their rulebook and which is approved by the CBB.

        Adopted January 2010

      • MIR-4.4.2

        The member must at all times maintain a level of financial resources and capital adequacy requirement required by the SRO, adequate for the level of business undertaken, or proposed to be undertaken.

        Adopted January 2010

      • MIR-4.4.3

        The SRO, as a part of its responsibility and accountability to manage all types of risks associated with its market, including the counterparty risk, must assume full responsibility for monitoring and adherence of its members to the capital adequacy requirements and shall also be responsible for reporting any significant developments or actions taken in this regard to the CBB, whether such developments or actions relate to the whole market or to a particular member.

        Adopted January 2010

      • MIR-4.4.4

        The SRO shall put in place a clearing and settlement system that promptly isolates the problem of a failing member by addressing its open proprietary positions and positions its holders on behalf of customers, or otherwise protects customers funds and assets from a member's default under the CBB Law, rules and regulations.

        Adopted January 2010

      • MIR-4.4.5

        The SRO must have a mechanism in place that is intended to monitor and evaluate continuously the risk of open positions or credit exposures that are sufficiently large to expose a risk to the market or to the clearing and settlement systems.

        Adopted January 2010

      • MIR-4.4.6

        The SRO shall use or design the clearing and settlement of securities systems to ensure that they are fair, effective and efficient and that they reduce systemic risk, large exposures risk, default risk and any other market disruption.

        Adopted January 2010

    • MIR-4.5 MIR-4.5 Systems and Controls

      • MIR-4.5.1

        The business rulebook of an SRO shall provide sufficient provision and requirements that cover the minimum requirements for maintaining systems and controls that each member is required to meet.

        Adopted January 2010

      • MIR-4.5.2

        The members must maintain systems and controls that are, in the opinion of the CBB, adequate for the scale and complexity of their activities.

        Adopted January 2010

      • MIR-4.5.3

        The members must maintain adequate segregation of responsibilities in their staffing arrangements, to protect against the misuse of systems or errors. Such segregation should ensure that no single individual has control over all stages of a transaction.

        Adopted January 2010

      • MIR-4.5.4

        The members must maintain systems and controls that are, in the opinion of the CBB, adequate to address the risks of money laundering and financial crime occurring in the member.

        Adopted January 2010

      • MIR-4.5.5

        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.

        Adopted January 2010

    • MIR-4.6 MIR-4.6 Obligation to Maintain Proper Records

      • MIR-4.6.1

        The member must maintain comprehensive books of accounts and other records, which must be available for inspection within the Kingdom of Bahrain by the CBB, or persons appointed by the CBB, at any time. Members must comply with the minimum record keeping requirements contained in the rulebook of the SRO and must comply with IAS (and relevant AAOIFI) standards.

        Adopted January 2010

      • MIR-4.6.2

        Every member shall ensure that all relevant books and other information, as may be required by the CBB and/or SRO for the purposes of this Module, be kept for a minimum of 10 years.

        Adopted January 2010

      • MIR-4.6.3

        The members must prepare their financial statements and accounts in accordance with the international accounts standards committee requirements and IFRS for the whole financial year, as well as for the interim financial statements, which are required to be audited by an external independent auditor in accordance with the international auditing standards.

        Adopted January 2010

      • MIR-4.6.4

        The members must prepare and submit quarterly prudential returns to be reviewed by the member's auditor before being submitted to the CBB.

        Adopted January 2010

      • MIR-4.6.5

        The members are required to submit the quarterly prudential returns (QPR) in the due timeframe. The members may apply in writing to the CBB for exemption from the requirements that the QPR be reviewed by the member's external auditor. This exemption would normally only be given where the member has established a track record of accurate and timely reporting, and there were no other supervisory issues of concern.

        Adopted January 2010

      • MIR-4.6.6

        The CBB may, without prejudice to Articles 37, 38, 89, 92, 94 and 95 of the CBB Law make regulations or issue circulars, directives, or notices in writing in respect of all or any of the matters, including the establishment and maintenance of such books for the handling of money or other assets of the member, for their clients.

        Adopted January 2010

    • MIR-4.7 MIR-4.7 Segregation and Handling of Clients' Assets

      • MIR-4.7.1

        For the purpose of this Module, "clients assets" means securities, money and other assets received or retained by, or deposited with a member in the course of its business for which it is liable to account to its client, and any securities, money or other assets accruing therefrom.

        Adopted January 2010

      • MIR-4.7.2

        The client assets are held or controlled by a member on behalf of a client if they are:

        (a) Directly held by the member;
        (b) Held in an account in the name of the member;
        (c) Held by a person, or in an account in the name of a person, controlled by the member; or
        (d) Held in an account with another person, controlled by the member.
        Adopted January 2010

      • MIR-4.7.3

        The CBB would consider a person to be controlled by a member if that person is inclined to act in accordance with the instructions of such members.

        Adopted January 2010

      • MIR-4.7.4

        The CBB would consider an account to be controlled by a member if that account is operated in accordance with the instructions of such members.

        Adopted January 2010

      • Segregation of Client Assets

        • MIR-4.7.5

          The member, or any person acting on its behalf, shall maintain sufficient systems and procedures in respect of the handling of securities, money or other assets, including but not limited to the requirement of maintaining books and records, segregation of the clients' securities, money and assets and the risk management and internal controls systems to address this requirement.

          Adopted January 2010

        • MIR-4.7.6

          A licensed member must hold client assets separate from its own at all times. The licensed member must, in connection with any clients' securities and funds received in the course of their business, establish and maintain separate client accounts, segregated from those used for their own accounts.

          Amended: April 2013
          Adopted January 2010

        • MIR-4.7.7

          A member may only use a client's assets for its own account, and/or for the account of any of its other clients if:

          (a) That client has given his express consent in writing;
          (b) The use of the client assets is restricted to the terms and conditions stipulated on the agreement agreed and signed by it; and
          (c) The agreement in which that client's consent is requested by the member gives clear information to him on:
          (i) The rights, obligations and responsibilities of the member and/or of the clients for whose account the member has been allowed to use the client's assets, with respect to the use of such assets; and
          (ii) The risks involved.
          Amended: January 2019
          Amended: April 2013
          Adopted January 2010

        • MIR-4.7.7A

          [This Paragraph was deleted in January 2019].

          Deleted: January 2019
          Added: April 2013

        • MIR-4.7.8

          A member should communicate to its clients in writing, at a minimum, the information regarding client assets held. This information must be reported after the initial transaction date not later than the required date stipulated in the designated clearing, settlement and central depository system.

          Adopted January 2010

        • MIR-4.7.9

          The member may maintain and hold the clients assets under the following agreements or arrangements:

          (a) Non discretionary securities account;
          (b) Discretionary accounts and portfolios;
          (c) Margin trading arrangements;
          (d) Depository and custody accounts;
          (e) Bank accounts related to the securities transactions (if applicable);
          (f) Securities lending and borrowing arrangements;
          (g) For the purpose of collateral arrangements;
          (h) Under specific mandates and arrangements approved by the CBB and SRO.

          All the abovementioned arrangements shall be entered into by and in a duly signed agreement between the member and its clients.

          Adopted January 2010

      • Client Money

        • MIR-4.7.10

          The member must hold client money in a separate client bank account designated for the purpose of settlement of the client's transaction.

          Adopted January 2010

        • MIR-4.7.11

          A client bank account is an account maintained by the Settlement Bank or other designated licensed bank holding client money of one or more clients in a bank account designated as such, in accordance with the terms of agreement with the client/clients.

          Adopted January 2010

        • MIR-4.7.12

          Client bank accounts may only be opened with banks licensed by the CBB to do business in the Kingdom of Bahrain, after being subject to due diligence by the member.

          Adopted January 2010

        • MIR-4.7.13

          For the purpose of rule MIR-4.7.12 when undertaking due diligence, the member should take reasonable steps to establish that the bank is appropriate considering, among other factors, the following:

          (a) Whether it is acceptable to the SRO;
          (b) Whether it is a duly licensed bank in good regulatory standing;
          (c) The capital adequacy of the bank;
          (d) The amount of client money to be placed, as a proportion of the bank's capital and deposits; and
          (e) The credit rating of the bank, if available.
          Adopted January 2010

        • MIR-4.7.14

          If a member holds or controls client assets which are not subject to the client asset provisions in an arrangement with a market counterparty, it must disclose to that market counterparty in writing that:

          (a) The protections conferred by the client asset protection rules do not apply to such client money;
          (b) As a consequence of (a), such client assets may be mixed with money belonging to the member, and may be used by the member in the course of the clearing and settling of the clients' securities transaction; and
          (c) In the event of insolvency, winding up of the member or other distribution event stipulated by the laws, rules and regulations, the clients assets shall not be considered as a part of the member's assets.
          Adopted January 2010

      • Transfer of Money to Eligible Third Parties

        • MIR-4.7.15

          The member may only pay, or permit to be paid, clients money into an account of a person who is a counterparty of the securities transaction, in accordance with the applicable clearing, settlement and central depository rules.

          Adopted January 2010

        • MIR-4.7.16

          The member must not hold money other than client money in a client bank account unless it is:

          (a) A minimum sum required to open the account or to keep it open;
          (b) Money temporarily held in the account in accordance with the mixed remittance requirements; or
          (c) Interest credited to the account which exceeds the amount due to clients as interest and which has not yet been withdrawn by the client or the member.
          Adopted January 2010

        • MIR-4.7.17

          If a member receives a mixed remittance (that is part client money and part other money), it must:

          (a) Pay the full sum into a client bank account; and
          (b) Pay the money that is not client money out of the client bank account within the same business day or otherwise as per provision of the agreement under rule MIR-4.7.7 (b).
          Adopted January 2010

      • Reconciliation

        • MIR-4.7.18

          A member must ensure that a system is implemented to perform reconciliations of both client securities account and client bank accounts after each transaction is executed for the benefit of that particular client. In addition, these reconciliations must be carried out on a regular basis, sufficient to ensure the accuracy of its records at least once a month on the last business day of each calendar month.

          Adopted January 2010

        • MIR-4.7.19

          A member must perform the reconciliations required under rule MIR-4.7.18 within 10 calendar days from the end of each month.

          Adopted January 2010

        • MIR-4.7.20

          In respect of reconciliation, the member must ensure that unresolved differences, shortfalls and excess balances are investigated and, where applicable, corrective action is taken as soon as is practicable. In such cases, the member must confirm such corrective action to the related clients and other counterparty's broker-dealers (if required).

          Amended: April 2013
          Adopted January 2010

      • Record-keeping

        • MIR-4.7.21

          Members must ensure that proper records, sufficient to show and explain the member's transactions and commitments in respect of its client assets are kept. These records must be retained for a period of a minimum of 5 years after they were made, unless otherwise required by law.

          Adopted January 2010

      • Auditor Reports

        • MIR-4.7.22

          Members that hold or control client assets must arrange for their external auditor to report on the members' compliance with the requirements related to the holding and segregation of the client's assets requirements.

          Adopted January 2010

        • MIR-4.7.23

          A member must submit the report, referred to in Paragraph MIR-4.7.22, in the form agreed by the CBB within 3 months of its financial year end.

          Amended: January 2018
          Adopted January 2010

        • MIR-4.7.23A

          The format of the Auditor's Report (Agreed Upon Procedure) is included in Part B of the Rulebook, as part of the supplementary information.

          Added: January 2018

      • Client Agreements and Statements

        • MIR-4.7.24

          Before the member undertakes any regulated activities or services mentioned under paragraph MIR-1.1.2 they must notify the client as to the appropriate terms and conditions which apply to each service or arrangement and sign the prescribed agreement(s). The agreement must cover, at a minimum, the following matters, wherever applicable:

          1. Representations and warranties by the client;
          2. Acknowledgements by the client;
          3. Clients' orders and instructions;
          4. Settlement and clearing services;
          5. Commission and charges;
          6. Information and advice;
          7. Undertaking of the client;
          8. Members responsibilities;
          9. The right to object to withdrawal or transfer of securities;
          10. Correspondence and confirmation;
          11. Terms and termination;
          12. Joint liability;
          13. Force Majeure;
          14. Severability;
          15. Notices: client; member;
          16. Amendment of the agreement; and
          17. Law and jurisdiction.
          Adopted January 2010

        • MIR-4.7.25

          The specimen of the abovementioned agreement shall be provided in the business rules of the SRO, as the case may be. The specimen shall contain the minimum requirements and information.

          Adopted January 2010

    • MIR-4.8 MIR-4.8 Final Accounts and Auditing

      • MIR-4.8.1

        Every member shall appoint one or more qualified and experienced external auditors for its accounts for every financial year. Prior written approval by the CBB will be required before appointing an auditor.

        Adopted January 2010

      • MIR-4.8.2

        In accordance with Article 61(b) of the CBB Law, if a member fails to appoint an auditor within four months from the beginning of the financial year, the CBB shall appoint such auditor.

        Amended: July 2014
        Adopted January 2010

      • MIR-4.8.3

        The member shall pay the fees of the auditor regardless of the manner in which such auditor is appointed.

        Adopted January 2010

      • MIR-4.8.4

        An auditor shall not be the chairman or a director in the member's board or a managing director, agent, representative or taking up any administrative work therein, or supervising its accounts, or a next of kin to someone who is responsible for the administration or accounts of a member, or having an extraordinary interest in a member as the SRO and/or CBB may determine.

        Adopted January 2010

      • MIR-4.8.5

        If any of the circumstances referred to in rule MIR-4.8.4 occurs after the appointment of the auditor, the member must appoint another auditor.

        Adopted January 2010

      • MIR-4.8.6

        The member shall provide the external auditor with all information and assistance necessary for carrying out his duties.

        Adopted January 2010

      • MIR-4.8.7

        The duties of the auditor shall include the preparation of a report on the final accounts. The report shall contain a statement on whether the member's accounts are correct and reflect the actual state of affairs of the member according to the auditing standards prescribed by the SRO and CBB, and whether the member has undertaken the auditor with any required information and clarification.

        Adopted January 2010

      • MIR-4.8.8

        The final audited accounts shall be presented to the general meeting of the member together with the auditor's report. A copy of these documents shall be sent to the CBB at least 15 days before the date of the general meeting.

        Adopted January 2010

      • MIR-4.8.9

        [This Paragraph was deleted in July 2014.]

        Deleted: July 2014
        Adopted January 2010

      • MIR-4.8.10

        Every member must, within 3 months following every financial year, send to the CBB its final audited accounts for all the transactions carried out until year end, as well as any other financial statements required by the SRO and CBB. Every member must publish extracts of the final audited accounts within 60 calendar days from the end of its financial year in 2 local daily newspapers, one in Arabic and the other in English.

        Amended: July 2016
        Amended: April 2013
        Adopted January 2010

      • MIR-4.8.11

        Audited financial statements must comply with International Financial Reporting Standards (IFRS)/ International Accounting Standards (IAS). For Islamic institutions, audited financial statements must comply with AAOIFI standards or where AAOIFI standards do not cover a subject, IFRS must be followed.

        Amended: July 2016
        Adopted January 2010

    • MIR-4.9 MIR-4.9 Obligation to Submit Periodic Reports

      • MIR-4.9.1

        A licensed member shall submit to the CBB and SRO:

        (a) Within 3 months after the end of its financial year or such longer period as the CBB may permit, a copy of its:
        1. Annual report and directors' report; and
        2. Auditors' report;
        (b) Within 45 days after the end of each of the first 3 quarters of its financial year or such longer period as the CBB may permit, or the preceding quarter, in such form as may be approved by the CBB, a copy of its:
        1. Profit and loss accounts;
        2. Balance sheet;
        3. Cash flow statement; and
        4. Change in shareholders equity;
        (c) Within 3 months after the end of its financial year or such longer period as the CBB may permit, a report on how the member has discharged its responsibilities under the CBB Law and regulations and the rules of the SRO during that financial year;
        (d) Such other report as the CBB may require for the proper administration of this Module, at such time or on such periodic basis as may be required by the CBB.
        Amended: April 2013
        Adopted January 2010

      • MIR-4.9.2

        The auditors' report referred to in rule MIR-4.9.1 (a) shall unless otherwise be provided to the CBB by way of a management letter, include the findings and recommendations of the auditors, if any, on the internal controls and risk management of the member; and

        (a) Any provision of this Module;
        (b) Any direction issued by an SRO and/or CBB under this Module; or
        (c) Any other relevant laws or regulations.
        Adopted January 2010

      • MIR-4.9.3

        Licensed members are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS). Licensees must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, the licensee must still access the IIS quarterly and confirm the information contained in the IIS. Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.

        Amended: April 2013

      • MIR-4.9.4

        Licensees failing to comply with the requirements of Paragraph MIR-4.9.3 or reporting inaccurate information are subject to financial penalties or other enforcement actions.

        Amended: April 2013

    • MIR-4.10 MIR-4.10 Additional Powers of the CBB in Respect of Auditors

      • MIR-4.10.1

        If an auditor of a licensed member in the course of the performance of his duties becomes aware of:

        (a) Any matter which in his opinion, adversely affects or may adversely affect the financial position of the licensed member to a material extent;
        (b) Any matter which in his opinion, constitutes or may constitute a breach of the CBB Law, rules and regulations, or an offence involving fraud or dishonesty; or
        (c) Any irregularity that has or may have a material effect upon the accounts of the licensed member, including any irregularity that affects or jeopardises or may affect or jeopardise, the assets and money of clients, then the auditor shall immediately send to the CBB and licensed exchange and/or licensed clearing house a written report of the matter or the irregularity.
        Adopted January 2010

      • MIR-4.10.2

        An auditor of a licensed member shall not be, in the absence of malice on his part, liable to any action for defamation at the suit of any person in respect of any statement made in his report under paragraph MIR-4.10.1.

        Adopted January 2010

      • MIR-4.10.3

        Rule MIR-4.10.2 shall not restrict or affect any right, privilege or immunity that the auditor of a licensed member may have as a defendant in an action for defamation.

        Adopted January 2010

      • MIR-4.10.4

        The CBB may impose all or any of the following duties on an auditor of a licensed member:

        (a) A duty to submit such additional information and reports in relation to his audit as the CBB considers necessary;
        (b) A duty to enlarge, extend or alter the scope of his audit of the business and affairs of the licensed member;
        (c) A duty to carry out any other examination or establish any procedure in any particular case;
        (d) A duty to submit a report on any matter arising out of his audit, examination or establishment of procedure referred to in MIR-4.10.4 (b) or (c), and the auditor shall carry out such duties.
        Adopted January 2010

      • MIR-4.10.5

        The licensed member shall remunerate the auditor in respect of the discharge by him of all or any of the duties referred to in paragraph MIR-4.10.4.

        Adopted January 2010

    • MIR-4.11 MIR-4.11 Obligation to Assist CBB

      • MIR-4.11.1

        A member shall provide such assistance to the CBB and/or SRO that is required for the performance of the functions and duties of the CBB, including the furnishing of such returns and the provisions of:

        (a) Such books and information:
        1. Relating to the business of the licensed member; or
        2. In respect of such dealings in securities or trading in futures contracts, products or other instruments; and
        (b) Such other information as the CBB may require for the proper administration of this Module in general, and for the investigation and enforcement purposes in particular;
        (c) Any information related to the handling and segregation of the clients assets.
        Amended: April 2013
        Adopted January 2010

      • MIR-4.11.2

        The CBB may at is discretion:

        (a) Call for the provision of additional information about the affairs of the member;
        (b) Carry out inspections of the office of the licensed member and inspect the books of accounts and other relevant books of the licensed member; and
        (c) Appoint one or more examiner or investigator to inquire into the affairs of the licensed member.
        Adopted January 2010

    • MIR-4.12 MIR-4.12 Obligation to Maintain Confidentiality

      • MIR-4.12.1

        Subject to rule MIR-4.12.2, a member and its officers, employees and representatives shall maintain, and aid in maintaining, the confidentiality of all clients or investors information that:

        (a) Comes to the knowledge of the member, or any of its officers, employees or representatives; and
        (b) Is in possession of the member, or any of its officers, employees or representatives.
        Adopted January 2010

      • MIR-4.12.2

        Rule MIR-4.12.1 shall not apply to:

        (a) The disclosure of investors or users information for such purposes, or in such circumstances as an SRO and/or CBB may prescribe;
        (b) Any disclosure of investors or users information which is authorised by the CBB to be disclosed or furnished; or
        (c) The disclosure of investors or users information pursuant to any requirement imposed under any law or order of court in Bahrain.
        Adopted January 2010

      • MIR-4.12.3

        For the avoidance of doubt, nothing in this section shall be construed as preventing a member from entering into a written agreement with an investor or user which obliges the member to maintain a higher degree of confidentiality than that specified in this section.

        Adopted January 2010

      • Exceptions to Obligation to Maintain Confidentiality

        • MIR-4.12.4

          Without prejudice to the requirements of Article 117 of the CBB Law and the CSD Module, the obligation to maintain confidentiality shall not apply to the disclosure of investor or client information by a member, or its officers, employees or representatives for the following purposes or in the following circumstances:

          (a) The disclosure of investor or client information is necessary for the making of a complaint or report under any law for an offence alleged or suspected to have been committed under such law;
          (b) The disclosure of investor or client information is permitted for such purpose specified in writing by the investor or client or, where the investor or client is deceased, by his appointed personal representative;
          (c) The disclosure of investor or client information is necessary for the execution by the member of a transaction in any securities or futures contracts or clearing or settlement of a transaction, and such disclosure is made only to another user which is:
          1. A licensed exchange and/or licensed clearing house through which the transaction is traded or cleared or settled; or
          2. A counterparty licensed member through which that transaction is executed, cleared or settled;
          (d) The disclosure of investor or client information is necessary:
          1. In any disciplinary proceedings of the SRO, or securities regulator, provided that reasonable steps are taken to ensure that client information disclosed to any third person is used strictly for the purpose for which the client information is disclosed; or
          2. For the publication, in any form or manner, of the disciplinary proceedings and the outcome thereof;
          (e) The client information disclosed is already in the public domain;
          (f) The disclosure of client information is made in connection with:
          1. The outsourcing or proposed outsourcing of any service or activity of the member to a third party;
          2. The engagement or potential engagement of a third party by the member to create, install or maintain back-up or internal control systems of the member; or
          3. The appointment or engagement of an auditor, lawyer, consultant or other professional by the member under a contract for service;
          (g) The disclosure of client information is necessary in:
          1. An application for a grant of probate or letters of administration or the resealing thereof in relation to the estate of a deceased client; or
          2. The administration of the estate of a deceased client, including such disclosure as may be required for this purpose by the relevant authority;
          (h) The disclosure of client information is made in connection with:
          1. In the case where the client is an individual, the bankruptcy of a client or
          2. In the case where the client is a body corporate, the winding up or receivership of a client; or
          (i) The disclosure of client information is made to an issuer for the purpose of the issuer's regulatory submission.
          Amended: April 2013
          Adopted January 2010

        • MIR-4.12.5

          Where client information is disclosed under paragraph MIR-4.12.4 (f), the member shall:

          (a) Maintain a record of the circumstances relating to the disclosure of client information referred to in paragraph MIR-4.12.4 (f); and the particulars of:
          1. In the case of the disclosure of information under paragraph MIR-4.12.4 (f), the outsourcing of the function of the member;
          2. In the case of the disclosure of information under paragraph MIR-4.12.4 (f), the engagement of the third party; and
          3. In the case of the disclosure of information under paragraph MIR-4.12.4 (f), the appointment or engagement of the auditor, lawyer, consultant or other professional and make that record available for inspection by the SRO and/or CBB;
          (b) Disclose the client information only insofar as this is necessary for the relevant purpose; and
          (c) Take reasonable steps to ensure that the client information disclosed is used by the entitled person to whom the disclosure is made strictly for the relevant purpose, and that the client information is not disclosed by that entitled person to any other person except with the consent of the SRO and/or CBB.
          Adopted January 2010

        • MIR-4.12.6

          Where disclosure of client information is permitted to be made for any purpose or in any circumstance under paragraph MIR-4.12.4 to a body corporate, the client information may be disclosed only to those officers of the body corporate to whom the disclosure is necessary for the relevant purpose.

          Adopted January 2010

        • MIR-4.12.7

          In paragraph MIR-4.12.6, "relevant purpose" means:

          (a) In the case of the disclosure of information under paragraph MIR-4.12.4 (f)(1), facilitating the outsourcing of the function of the member;
          (b) In the case of the disclosure of information under paragraph MIR-4.12.4 (f)(2), facilitating the engagement of the third party; and
          (c) In the case of the disclosure of information under paragraph MIR-4.12.4 (f)(3), facilitating the appointment or engagement of the auditor, lawyer, consultant or other professional.
          Adopted January 2010

    • MIR-4.13 MIR-4.13 Confirmation Requirements and Provision of Information to Clients

      • MIR-4.13.1

        A member shall confirm to its clients or participants the execution of a transaction, as well as the clearing, settlement and depository of securities in the manner and time prescribed by the rules of the SRO, (including the trading rules, and the clearing, settlement and depository rules of the licensed exchange and/or the licensed clearing house), as the case may be.

        Adopted January 2010

      • MIR-4.13.2

        A member shall provide its clients or participants with the periodic and ad hoc statements in the manner and time prescribed by the rules of the SRO, as the case may be.

        Adopted January 2010

      • MIR-4.13.3

        A member shall:

        (a) Make available upon request by; or
        (b) Publish in a manner that is accessible to, any investor who accesses or uses, or potential investor who may access or use, any system or services undertaken or provided by that member:
        1. All regulated activities or services of the member;
        2. All products available on the regulated activities undertaken by the member;
        3. Applicable fees and charges;
        4. Applicable margin requirements; and
        5. Any arrangement that may be in place to compensate an investor who suffers pecuniary loss as a result of these regulated activities or insolvency of the member.
        Amended: April 2013
        Adopted January 2010

    • MIR-4.14 MIR-4.14 Transmission and Storage of Transactions and Clients Information

      • MIR-4.14.1

        A member shall take or arrange to take all reasonable measures to maintain the integrity and security of the transmission and storage of client information related to the client's orders and transactions undertaken by it, in accordance with the rules of the SRO.

        Adopted January 2010

      • Records of Telephone Conversations and Electronic Communications

        • MIR-4.14.2

          In addition to meeting the book-keeping and record-keeping requirements as per the applicable laws, rules and regulations, all members of SROs must maintain records of telephone conversations and electronic communications, including facsimile, email and other instant messaging devices relating to their activities in the securities market, as required by the CBB's rules, regulations and directives, including but not limited to the following activities:

          (a) Receiving client orders;
          (b) Executing client orders;
          (c) Arranging for client orders to be executed;
          (d) Carrying out transactions on behalf of the member of an SRO, or another person in the member of an SRO group, and which are part of the member of an SRO's trading activities, or the trading activities of another person in the member of an SRO group;
          (e) Executing orders that result from decisions by the member of an SRO to deal on behalf of its client;
          (f) Placing orders with other entities for execution that result from decisions by the member of an SRO to deal on behalf of its client.
          Adopted January 2010

    • MIR-4.15 MIR-4.15 Business Continuity Plan

      • MIR-4.15.1

        A member, in accordance with the rules of the SRO, shall maintain by itself or through arrangements with the SRO, at all times a plan of action (referred to in this Module as a Business Continuity Plan) setting out the procedures and establishing the systems necessary to restore fair, orderly and transparent operations of any regulated activities it provides or undertakes, in the event of any disruption to its operations.

        Adopted January 2010

      • MIR-4.15.2

        A member shall review the procedures and internal systems referred to in rule MIR-4.15.1 on such regular basis as may be specified in the Business Continuity Plan and the rules of the SRO.

        Adopted January 2010

      • MIR-4.15.3

        A member shall immediately notify the SRO of any activation of its Business Continuity Plan and of any action taken or intended to be taken to restore fair, orderly and transparent operations it undertakes.

        Adopted January 2010

      • MIR-4.15.4

        A member shall, within 14 days or such longer period as the CBB may permit, inform the SRO and/or CBB of any material change to the Business Continuity Plan, and shall submit at the request of the CBB, a copy of the new plan to the CBB.

        Adopted January 2010

    • MIR-4.16 MIR-4.16 Outsourcing

      • MIR-4.16.1

        A member shall not outsource any function related to any regulated activities without prior approval of the CBB, and/or SRO.

        Adopted January 2010

      • MIR-4.16.2

        The CBB would normally not grant its approval related to the outsourcing application, when such outsourcing application is related to controlled functions, or core business of such licensed member.

        Amended: April 2013
        Adopted January 2010

      • MIR-4.16.3

        The member seeking to outsource functions related to any undertaking of regulated activities should have the following in place:

        (a) Comprehensive policy to guide the assessment of whether and how these functions or services can be appropriately outsourced;
        (b) The management shall have the responsibility for the outsourcing policy and related overall responsibility for outsourced functions or services undertaken under that policy;
        (c) The member retains the ultimate res'ponsibility for the functions or services that are outsourced;
        (d) The member must obtain the approval of the respective SRO and notify the CBB before committing to an outsourcing arrangement;
        (e) The member must maintain and regularly review contingency plans to enable him to set-up alternative arrangements should the outsourcing provider fail;
        (f) The member must nominate an officer of senior management with day-to-day responsibility for handling the relationship with the outsourcing provider and ensuring that relevant risks are addressed;
        (g) All the outsourcing contract must be legally enforceable;
        (h) A notice period of at least three months shall be required from the outsourcing party to terminate the contract;
        (i) On termination all data pertaining to the member and its clients shall be returned by the outsource provider to the member; and
        (j) For the entire duration of the outsourcing contact, this shall be subject to the confidentiality requirements in general, and information related to the clients or users in particular.
        Adopted January 2010

    • MIR-4.17 MIR-4.17 Compliance Officer [This Section was deleted in April 2013 as requirements are now found under Paragraphs MIR-3.1.6 and MIR-3.1.7.]

      • MIR-4.17.1

        [This Paragraph was deleted in April 2013].

        Deleted: April 2013

      • MIR-4.17.2

        [This Paragraph was deleted in April 2013].

        Deleted: April 2013

    • MIR-4.18 MIR-4.18 Non-Compliance with Business Rules, Listing Rules, Clearing and Settlement Rules not to Substantially Affect the Rights of Persons

      • MIR-4.18.1

        Any failure by a member to comply with:

        (a) The CBB Law, rules and regulations;
        (b) This Module;
        (c) The rules of the SRO; or

        in relation to a matter shall not prevent the matter from being treated, for the purposes of this Module, as done in accordance with the business rules, listing rules, trading rules, or clearing, settlement and depository rules, so long as the failure does not substantially affect the rights of the person entitled to require compliance with such rules.

        Adopted January 2010

    • MIR-4.19 MIR-4.19 Market Making Practice for Liquidity Enhancement

      • MIR-4.19.1

        This section (MIR-4.19) sets out the requirements and obligations applicable to members registered as market makers and issuers interested to enter into an agreement with market makers for the purpose of enhancing liquidity in the listed securities of the issuer.

        Added: January 2019

      • Liquidity Enhancement Practice

        • MIR-4.19.2

          Issuers, whose securities are already listed on a licensed exchange or licensed market operator and where the securities based on the criteria established by the licensed exchange or licensed market operator are eligible for market making, may enter into a market making agreement with a market maker with an objective to enhance liquidity for a specific period of time thereby encouraging regular trading activity and avoiding price fluctuations which are not in line with the market trend.

          Added: January 2019

        • MIR-4.19.3

          The market making agreement referred to in Paragraph MIR-4.19.2 must define the conditions in which the market maker will trade on behalf of the issuer by buying and selling the issuer's securities with the sole purpose of enhancing liquidity and regularity of trading in the securities.

          Added: January 2019

        • MIR-4.19.4

          An issuer concurrently must not enter into market making agreement with more than one market maker for a listed security.

          Added: January 2019

      • Market Making Agreement

        • MIR-4.19.5

          The market making agreement must specify the conditions within which the market maker will trade on behalf of the issuer by buying and selling the issuer's securities.

          Added: January 2019

        • MIR-4.19.6

          The sole purpose of the market making agreement must be to enhance liquidity and improve regularity of trading.

          Added: January 2019

        • MIR-4.19.7

          The market making agreement must establish the initial balances and the minimum balances to be maintained in the securities account and the bank account to ensure continuity of market making activity and the measures to be adopted when the balances in the two accounts are insufficient to enable trades under the market making agreement.

          Added: January 2019

        • MIR-4.19.8

          The market making agreement must establish the market maker's independence as a provider of liquidity

          Added: January 2019

        • MIR-4.19.9

          The market making agreement must establish the conditions for the remuneration payable by the issuer to the market maker.

          Added: January 2019

        • MIR-4.19.10

          The duration of the market making agreement must not exceed a period of 12 months. Upon completion of the initial 12 months period and subject to mutual agreement of issuer and market maker, the market making agreement may be extended for an additional period of 12 months provided the licensed exchange or licensed market operator grants its approval for such an extension.

          Added: January 2019

      • Independence of the Market Maker

        • MIR-4.19.11

          The market maker must carry out the transactions under the market making agreement with total independence from the issuer, and neither the market maker nor the issuer may request or give any type of instructions or guidance. In particular, the issuer must not instruct, guide or intervene in the trading activity and the market maker must have sole discretion as to the timing of transactions in the issuer's securities.

          Added: January 2019

        • MIR-4.19.12

          The market maker must have an internal organisational structure such that trading decisions concerning the market making activities are independent from the activities related to investment services, proprietary account, client account or any other services provided by the market maker.

          Added: January 2019

        • MIR-4.19.13

          Without prejudice to being reimbursed for the expense incurred towards market making, the remuneration method of the market maker must be consistent with the purpose of the activity and must not impair the market maker's independence.

          Added: January 2019

        • MIR-4.19.14

          An issuer must ensure that the remuneration method does not encourage the market maker to influence the security price and/or trading volume through trades in the security. To that end, fees must be set within reasonable and justifiable levels with a maximum cap.

          Added: January 2019

        • MIR-4.19.15

          A market maker must not use its own funds to engage in trades under the market making agreement.

          Added: January 2019

      • Securities account and bank account associated with the market making agreement

        • MIR-4.19.16

          Trades performed under the market making agreement must be recorded through entries made by the market maker in two accounts, (i) a securities account and (ii) a bank account, both opened in the name of the issuer and used solely for market making transactions.

          Added: January 2019

        • MIR-4.19.17

          When the market making agreement is terminated, regardless of the reason, the securities account and the bank account referred to in Paragraph-MIR-4.19.16 must be cancelled in accordance with the following procedure:

          a) Bank account: The market maker will transfer the balance to another account designated by the issuer.
          b) Securities Account: The market maker must sell the securities in the securities account. Such sales must be performed in the issuer's best interests but without interfering with or hampering normal market operations and without misleading other market participants.
          Added: January 2019

        • MIR-4.19.18

          Provisions of Paragraph MIR-4.19.17 should not apply where:

          a) The securities are transferred to another market maker entrusted with another market making agreement by the same issuer.
          b) The issuer, upon termination of market making agreement, may recover a number of securities, in which case that number may not exceed the number of securities initially deposited by the issuer.
          Added: January 2019

      • Non-withdrawal of Securities

        • MIR-4.19.19

          Unless the market making agreement is terminated, securities allocated by the issuer for the purpose of market making or securities acquired during the course of market making activity cannot be withdrawn from the securities account except as a result of transactions carried out under the market making agreement.

          Added: January 2019

      • Conditions for trading

        • MIR-4.19.20

          The transactions carried out under a market making agreement must not impair the orderly functioning of the market.

          Added: January 2019

        • MIR-4.19.21

          Trades executed within the framework of market making agreement must not create artificial change in the securities price with respect to the market trend, or hamper the market's normal operations, or mislead other market participants.

          Added: January 2019

        • MIR-4.19.22

          In the course of discharging its obligation to provide liquidity, the market maker must trade in the official secondary market of the licensed exchange or licensed market operator and in accordance with the trading rules.

          Added: January 2019

        • MIR-4.19.23

          Where a licensed exchange or licensed market operator allows for participation of market maker during pre-opening period, a market maker must ensure that its order during the pre-opening period does not have a material influence on the securities price.

          Added: January 2019

        • MIR-4.19.24

          The market maker and the issuer must at all times comply with the CBB law, rules and regulations on insider trading.

          Added: January 2019

        • MIR-4.19.25

          Securities purchased or made available to the market maker by the issuer cannot be allocated for other purposes before the completion of the market making activity set forth in the market making agreement.

          Added: January 2019

        • MIR-4.19.26

          The issuer must not engage, directly or indirectly, in any other trades in its own security while the market making agreement is in force except for such transactions where the issuer has obtained necessary approvals from the CBB.

          Added: January 2019

        • MIR-4.19.27

          For the purposes of MIR-4.19.26, market making activity must remain suspended in the following cases:

          (a) From the date of the announcement of a takeover bid for the issuer's shares, up until the end of offer period; and
          (b) During share repurchase programmes.
          Added: January 2019

        • MIR-4.19.28

          The issuer and/or the market maker must comply with all other modules in Volume 6.

          Added: January 2019

        • MIR-4.19.29

          Market makers failing to comply with the requirements of Section MIR-4.19 are subject to enforcement measures as outlined in Module MIE (Market Surveillance, Investigation and Enforcement).

          Added: January 2019

      • Reporting Requirements

        • MIR-4.19.30

          In addition to the reporting obligations and disclosure requirements with regards to securities to which issuers are subject to, an issuer that enters into a market making agreement must disclose the following by means of a public announcement as well as post it on its website:

          (a) Before the market making agreement comes into force, the identity of the market maker with which it has been arranged, the class of security and the licensed exchange or licensed market operator where the trades are to be made, the duration of the agreement, and the number of securities and the amount allocated to the securities account and bank account, respectively.
          (b) Each month and when the market making agreement is terminated, the issuer must disclose the transactions in own securities made under the market making agreement, detailing the total number of own securities that were purchased and the total number of own securities sold, the total amount of money paid and the total amount of money received, and the balance of the securities account and cash accounts at the end of the reporting period. The public announcement must be made within 10 days from the end of the reporting period.
          (c) In the event of termination of the market making agreement, in addition to complying with the requirements of MIR-4.19.30(b), the issuer must disclose the termination immediately.
          Added: January 2019

        • MIR-4.19.31

          An issuer must submit, to the CBB, a copy of the signed market making agreement as well as all other public announcements referred to in Paragraph MIR-4.19.30.

          Added: January 2019

        • MIR-4.19.32

          An issuer must file the market making agreement and obtain written approval from the licensed exchange or licensed market operator. The approval must be obtained prior to commencement of market making activity.

          Added: January 2019

      • Termination of Market Making Agreement

        • MIR-4.19.33

          Where an issuer or a market maker, regardless of the reason, intends to terminate the market making activity with respect to the issuer's security, the market maker must submit a written request and seek prior approval from the licensed exchange or licensed market operator.

          Added: January 2019

        • MIR-4.19.34

          A market maker, in the manner prescribed by the rules and regulations of the licensed exchange or licensed market operator, must by way of a public announcement inform the market regarding the date of cessation of market making activity in the issuer's security.

          Added: January 2019

        • MIR-4.19.35

          The public announcement referred to in Paragraph MIR-4.19.34 must be made at least 30 days prior to the effective date of cessation of market making activity. The market maker and the issuer must perform their respective obligations as specified in the market making agreement during this 30 days period. In particular, the market making activity must continue during the aforesaid period.

          Added: January 2019

      • Record Keeping

        • MIR-4.19.36

          An issuer and the market maker must maintain separate records of all the information pertaining to transactions under the market making agreement for a minimum period of 10 years.

          Added: January 2019

      • Disclosure to clients

        • MIR-4.19.37

          Where a member is registered as market maker, such member must disclose to its client the existence of the market maker agreement entered into between the licensed member and the licensed exchange and written consent must be obtained from the client stating his awareness of the market maker arrangement between the member and the licensed exchange and that he has fully understood the potential risk and conflict of interest associated with such activities.

          Added: January 2019

      • Additional Market Making Rules for Equity Securities

        • Shareholders' Approval and Share Repurchase

          • MIR-4.19.38

            In addition to the aforementioned rules specified under Section MIR4.19, an issuer of equity security must seek prior approval of shareholders at a general meeting before entering into a market making agreement.

            Added: January 2019

          • MIR-4.19.39

            An issuer may repurchase its own shares for the purpose of market making after obtaining shareholders' approval.

            Added: January 2019

          • MIR-4.19.40

            The maximum number of shares that an issuer can repurchase for the purpose of market making must not exceed 3% of the total issued shares.

            Added: January 2019

          • MIR-4.19.41

            The repurchase limit of 3% referred to in Paragraph MAE-4.19.40 must be included as part of the overall repurchase limit of 10% set out under TMA-4.1.8.

            Added: January 2019

          • MIR-4.19.42

            Where an issuer undertakes share repurchase for the purpose of market making, the issuer must ensure that the share repurchase plan complies with the requirements of Module TMA (see Section TMA - 4.1).

            Added: January 2019

        • Material Rights of Shares Deposited in the Securities Account

          • MIR-4.19.43

            Apart from the right to allocation of new shares free of charge, all other material rights of the shares deposited in the securities account must remain suspended.

            Added: January 2019

          • MIR-4.19.44

            The issuer and the market maker must ensure that the suspension of material rights referred to in Paragraph-4.19.43 is complied with, particularly with regards to dividend payments.

            Added: January 2019

        • Prior acquisition of shares to deposit in securities account

          • MIR-4.19.45

            Where the issuer does not deposit shares into the securities account or deposits a number of shares that is insufficient to enable market making operation to commence under the agreement, there should be an initial period during which the market maker may only buy shares of the issuer until it attains the volume that is predetermined in the market making agreement. Such acquisition should be for the sole purpose of enabling the market maker to commence operations under the market making agreement and they should be performed in the issuer's best interest but without interfering or hampering normal market operations and without misleading other market participants.

            Added: January 2019

          • MIR-4.19.46

            The shares acquired in the initial period should be deposited in the securities account referred to in Paragraph MIR-4.19.16.

            Added: January 2019

          • MIR-4.19.47

            The market maker should not sell any of the issuer's shares deposited in the securities account until the initial period concludes or until it attains the limits established in terms of number of shares or value of shares for the purpose of undertaking market making.

            Added: January 2019

          • MIR-4.19.48

            Where the initial period concludes and the minimum initial balance of shares in the securities account referred to in Paragraph MIR-4.19.16 has not been attained, the issuer and the market maker may:

            a) Extend the initial period by a length of time not greater than the initially established period.
            a) Terminate the agreement
            b) Establish a lower number of shares
            Added: January 2019