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  • MAM-B MAM-B Scope of Application

    • MAM-B.1 MAM-B.1 Scope

      • MAM-B.1.1

        This Module shall apply to:

        (a) Any behaviour or conduct occurring within Bahrain; or any transaction or expected transaction done by or on behalf of any person(s) within Bahrain in relation to securities offered, issued or listed in Bahrain or elsewhere;
        (b) Any behaviour or conduct occurring outside Bahrain or any transaction or expected transaction done by or on behalf of any person(s) outside Bahrain in relation to securities offered, listed or issued in Bahrain;
        (c) Any behaviour or conduct occurring within Bahrain; or any transaction or expected transaction done by or on behalf of any person(s) within Bahrain in relation to:
        (i) Futures contracts, whether traded on a futures market in Bahrain or elsewhere; or
        (ii) Leveraged foreign exchange trading contracts, whether in Bahrain or elsewhere; and
        (d) Any behaviour or conduct occurring outside Bahrain; or any transaction or expected transaction done by or on behalf of any person(s) outside Bahrain in relation to:
        (i) Futures contracts traded on a futures market in Bahrain;
        (ii) Leveraged foreign exchange trading contracts in Bahrain; or
        (iii) Leveraged foreign exchange trading contracts that are accessible from Bahrain.
        November 2010

      • MAM-B.1.2

        This Module is applicable to all market participants and relevant persons, including but not limited to issuers of securities or any person acting on their behalf, licensed exchanges, licensed market operators, licensed clearing houses, depositories, investment firms, business trusts, collective investment undertakings, listed companies, any person acting for or on behalf of listed companies, shareholders of listed companies, share registrars, lead managers, underwriters, professional advisors, listing agents, auditors, financial analysts and any other person who engages or encourages others to engage in any acts of commission or omission covered by the scope of this Module, irrespective of whether such person is a market particpant or not.

        November 2010

    • MAM-B.2 MAM-B.2 Definitions

      For the purpose of this Module, the following definitions shall apply:

      November 2010

      • MAM-B.2.1

        "A Person Associated with another Person":

        (1) Any reference in this Module to a person associated with another person shall be construed as a reference to:
        (a) Where the other person is a company:
        (i) A director or secretary of the company;
        (ii) A related company; or
        (iii) A director or secretary of such related company;
        (b) Where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a company, a person with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal, or express or implied:
        (i) By reason of which either of those persons may exercise, directly or indirectly, control the exercise of, or substantially influence the exercise of, any voting power attached to a share in the company;
        (ii) With a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the company; or
        (iii) Under which either of those persons may acquire from the other of them shares in the company or may be required to dispose of such shares in accordance with the directions of the other of them;
        except that in relation to a matter relating to shares in a company, a person may be an associate of the company and the company may be an associate of a person;
        (c) A person with whom the other person is acting, or proposes to act, in concert in relation to the matter to which the reference relates;
        (d) Where the matter to which the reference relates is a matter, other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a company:
        (i) Subject to paragraph (2) a person who is a director of a company of which the other person is a director; or
        (ii) A trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money;
        (e) A person with whom the other person is, according to any subsidiary legislation made under this Module, to be regarded as associated in respect of the matter to which the reference relates;
        (f) A person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or
        (g) Where the other person has entered into, or proposed to enter into a transaction or has done, or proposes to do so, any other act or thing, with a view to becoming associated with a person as referred to in sub-paragraph (a), (b), (c), (d), (e) or (f), that last-mentioned person.
        (2) Where, in any proceedings under this Module, it is alleged that a person referred to in paragraph (1) (d) (i) was associated with another person at a particular time, the first-mentioned person shall not be considered to be so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the first-mentioned person at that time knew or ought reasonably to have known the material particulars of that matter.
        (3) A person shall not be considered to be associated with another person by virtue of paragraph (1) (b), (c), (e) or (f) by reason only of one or more of the following:
        (a) That one of those persons furnishes advice to, or acts on behalf of, the other person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person;
        (b) That one of those persons, a customer, gives specific instructions to the other, whose ordinary business includes dealing in securities, trading in futures contracts or leveraged foreign exchange trading, to acquire shares on the customer's behalf in the ordinary course of that business;
        (c) That one of those persons has sent, or proposes to send, to the other a take-over offer, or has made or proposes to make, offers under a take-over announcement, within the meaning of the Take-overs, Mergers, Acquisitions and Share Repurchases (TMA) Module in relation to shares held by the other;
        (d) That one of those persons has appointed the other, otherwise than for valuable consideration given by the other or by an associate of the other, to vote as a proxy or representative at a meeting of members, or of a class of members of a company.
        November 2010

      • MAM-B.2.2

        "Beneficial Owner" the term "beneficial owner" of securities for the purposes of this Module refers to any person who, even if not the recorded owner of the securities, has or shares the underlying benefits of ownership. These benefits include the power to direct the voting or the disposition of the securities, or to receive the economic benefit of ownership of the securities. A person is also considered to be the "beneficial owner" of securities if that person has the right to acquire such securities within a certain period of time, either by option or other agreement. Beneficial owners include persons who hold their securities through one or more trustees, brokers, agents, legal representatives or other intermediaries, or through issuers in which they have a "controlling interest", which means the direct or indirect power to direct the management and policies of the issuer, or any other entity in question.

        November 2010

      • MAM-B.2.3

        "Capital Market Service provider" means any person licensed or authorised or involved in providing any activity specified under Article 80 of the CBB Law.

        November 2010

      • MAM-B.2.4

        "Connected Persons" in relation to an individual means:

        (a) The individual's spouse and his/her son, adopted son, stepson, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister, under his/her guardianship or control; or
        (b) A firm or company in which the individual or any of the persons mentioned in sub-paragraph (a) has control of not less than 10% of the voting power in the firm or company, whether such control is exercised individually or jointly; Connected persons in relation to a firm or company means another firm or company in which the first-mentioned firm or company has control of not less than 10% of the voting power in that other firm or company.
        November 2010

      • MAM-B.2.5

        "CMSD" means the Capital Markets Supervision Directorate of the Central Bank of Bahrain.

        November 2010

      • MAM-B.2.6

        "Dealing in Securities" includes (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into an any agreement for or with a view to acquiring, disposing of, subscribing for, or underwriting securities.

        November 2010

      • MAM-B.2.7

        "Director and Senior Management" includes any member of senior management, regardless of title, including:

        (a) The issuer's directors;
        (b) Senior management, including the General Manager, Chief Executive Officers, Presidents, Heads of Finance, Heads of Business Departments;
        (c) Partners with unlimited liability, in the case of a limited partnership with share capital;
        (d) Nominees to serve in any of the aforementioned positions; and
        (e) Founders, if the issuer has been established for fewer than two years.
        November 2010

      • MAM-B.2.8

        (a) "Fraud" includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss, and shall also include:
        (i) A knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment;
        (ii) A suggestion as to a fact which is not true by one who does not believe it to be true;
        (iii) An active concealment of a fact by a person having knowledge or belief of the fact;
        (iv) A promise made without any intention of performing it;
        (v) A representation made in a reckless and careless manner whether it be true or false;
        (vi) Any such act or omission as any other law specifically declares to be fraudulent;
        (vii) Deceptive behaviour by a person depriving another of informed consent or full participation;
        (viii) A false statement made without reasonable ground for believing it to be true;
        (ix) The act of an issuer of securities giving out misinformation that affects the market price of the security, resulting in investors being effectively misled even though they did not rely on the statement itself or anything derived from it other than the market price;
        and "fraudulent" shall be construed accordingly.

        Nothing contained in this paragraph shall apply to any general comments made in good faith in regard to:

        (a) The economic policy of the government;
        (b) The economic situation of the country;
        (c) Trends in the securities market; or
        (d) Any other matter of a like nature.
        November 2010

      • MAM-B.2.9

        "Insider" means any person who has obtained inside information;

        (a) By virtue of his employment or profession;
        (b) Being an officer or shareholder of the issuer of the securities; or
        (c) Through illegal means.

        A person may be an insider if he is already aware that such information is classified as inside information even though none of the above applies to him.

        All persons who have access or come into possession of material inside information before its public release are considered insiders. Such persons include controlling shareholders, "directors and senior management", officers and employees, and frequently should also include any officials of the CBB and the Exchange who have access to such information, outside attorneys, accountants, auditors, underwriters, investment bankers, public relations advisers, advertising agencies, consultants and other independent contractors. The husbands, wives, immediate families and those under the control of insiders may also be regarded as insiders. Where acquisition or other negotiations are concerned, the above relationships apply to other parties to the negotiations as well. Further, for purposes of this Module, insiders include "tippees" who come into possession of material inside information.

        November 2010

      • MAM-B.2.10

        "Inside Information" means information that;

        (a) Is precise in nature relating directly or indirectly to one or more of the securities or the issuer thereof;
        (b) Has not been made public;
        (c) If made public, is likely to have a significant impact on the price of those securities or their derivatives;
        (d) Is, directly or indirectly, related to derivatives of commodities which the traders expect to be disclosed according to the market regulations.
        November 2010

      • MAM-B.2.11

        "Insider Trading" refers not only to the purchase or sale of an issuer's equity and debt securities, but also to the purchase or sale of puts, calls or other options with respect to such securities. Such trading is deemed to be done by an insider whenever he has any beneficial interest, direct or indirect, in such securities or options, regardless of whether they are actually held in his name. Included in the concept of "insider trading" is "tipping", or revealing inside information to outside individuals, to enable such individuals to trade in the issuer's securities on the basis of undisclosed information.

        November 2010

      • MAM-B.2.12

        "Information" includes:

        (a) Matters of supposition and other matters that are insufficiently definite to warrant being made known to the public;
        (b) Matters relating to the intentions, or the likely intentions, of a person;
        (c) Matters relating to negotiations or proposals with respect to:
        (i) Commercial dealings;
        (ii) Dealing in securities; or
        (iii) Trading in futures contracts;
        (d) Information relating to the financial performance of a company or an issuer, or otherwise;
        (e) Information that a person proposes to enter into, or had previously entered into one or more transactions or agreements in relation to securities or has prepared or proposes to issue a statement relating to such securities; and
        (f) Matters relating to the future.
        November 2010

      • MAM-B.2.13

        "Information Disclosed Widely Enough" for the purposes of this Module, information is disclosed widely enough if:

        (a) It consists of readily observable matter;
        (b) Without limiting the generality of paragraph (a):
        (i) It has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in securities of a kind whose price or value might be affected by the information; and
        (ii) Since it was so made known, a reasonable period for it to be disseminated among such persons has elapsed; or
        (c) It consists of deductions, conclusions or inferences made or drawn from either or both of the following:
        (i) Information referred to in paragraph (a);
        (ii) Information made known as referred to in paragraph (b) (i);
        (d) It is disclosed in the manner and within the timeframe stipulated by the CBB rules and regulations.
        November 2010

      • MAM-B.2.14

        "Market Information" means any published information about trading or non-trading in certain types of securities, their number, prices, range of price for trading or the identity of those involved or who may be involved, in any capacity, such as trading.

        November 2010

      • MAM-B.2.15

        "Materiality" information is material if its omission or mis-statement could influence the economic decisions of the users taken on the basis of the financial statements. For the purpose of this Module, a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, buy or sell the first-mentioned securities.

        November 2010

      • MAM-B.2.16

        "Manipulation" includes any deliberate/reckless act or attempt or act, expression, omission or concealment or influence to interfere with the free and fair functioning of the market or to introduce misinformation or misleading appearance in the market, or to impede judgement of investors and market participants.

        November 2010

      • MAM-B.2.17

        "Permanent Insider" means members of the Board of Directors of a company, its senior management, the Issuer itself, and such other persons as decided by the Issuer's Board to have access to inside information relating to the Issuer from time-to-time

        November 2010

      • MAM-B.2.18

        "Profit" includes the avoidance of any loss.

        November 2010

      • MAM-B.2.19

        "Purchase" in relation to securities, includes, in the case of an option contract under which a party acquires an option or right from another party, acquiring the option or right under the contract, or taking an assignment of the option or right, whether or not on another's behalf.

        November 2010

      • MAM-B.2.20

        "Related Company" means where a company:

        (a) Is the holding company of another company;
        (b) Is a subsidiary of another company; or
        (c) Is a subsidiary of the holding company of another company,

        that first-mentioned company and that other company shall for the purposes of this Module be deemed to be related to each other.

        November 2010

      • MAM-B.2.21

        "Rumour" includes an unverified statement or account or explanation of events, circulating from person to person, whose veracity or authenticity or trueness is not immediately verifiable.

        November 2010

      • MAM-B.2.22

        "Securities" means shares or bonds issued by shareholding companies, government debt instruments and the following financial instruments:

        (a) Shares in companies and other securities equivalent to shares in companies or other entities, and depositary receipts in respect of shares;
        (b) Bonds or other forms of debt, including depositary receipts in respect of such securities;
        (c) Warrants;
        (d) Units, rights or interests (however described) of the participants in a collective investment scheme;
        (e) Options, futures and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event);
        (f) Options, futures and any other derivative contract relating to commodities that can be physically settled;
        (g) Units to Real Estate Investment Trusts (REITs);
        (h) Index tracking products including Islamic indices;
        (i) Any other financial instrument approved as a financial instrument by the CBB for the purpose of trading such instrument on an exchange; and
        (j) Islamic securities, being those financial instruments that are Shari'a compliant.
        November 2010

      • MAM-B.2.23

        "Sell" in relation to securities, includes, in the case of an option contract under which a party acquires an option or right from another party:

        (a) Grant or assign the option or right; or
        (b) Take, or cause to be taken, such action as releases the option or right, whether or not on another's behalf.
        November 2010

      • MAM-B.2.24

        "Trading and Procuring Trading in Securities" for the purposes of this Module, trading in securities that is ordinarily permitted on the securities market or future market shall be taken to be permitted on that securities market or futures market, even though trading in any such securities on that securities market or futures market is suspended.

        For the purposes of this Module, but without limiting the meaning that the expression "procure" has apart from this paragraph, if a person incites, induces, or encourages an act or omission by another person, the first-mentioned person is taken to procure the act or omission by the other person.

        November 2010

      • MAM-B.2.25

        "Temporary Insider" means any person who is an insider, but not a permanent insider.

        November 2010

      • MAM-B.2.26

        "Person" means unless the context requires otherwise, a natural or legal person.

        November 2010