• HC-B.3 HC-B.3 Definitions

    • HC-B.3.1

      Approved Person(s)Approved Persons are individuals holding certain specified positions in CBB licensees; they must be approved by the CBB prior to taking on those positions and must demonstrate that they are fit and proper. This list of positions subject to the CBB's Approved Persons regime vary according to the CBB license category, but generally cover directors and senior management, as well as certain other positions. Approved Persons requirements are specified in the relevant Rulebook Volume for the license category in question.

      July 2011

    • HC-B.3.2

      "Capital Market Service Provider" (hereinafter referred to as CMSP) means any person licensed, or authorised or involved in providing any activity specified under Article 80 of the CBB Law and includes SROs and their members. For the purposes of this Module, listed companies are not included in the definitions of CMSP companies; they are subject to different requirements under this Module (CMSPs only have to comply with Chapter 10 while listed companies must comply with all Chapters other than Chapter 10).

      Amended: January 2012
      July 2011

    • HC-B.3.3

      "CEO" means a company's Chief Executive Officer. The board shall determine that person's actual title, which may be "CEO", "Chief Executive Officer", "President", "Managing Director", or another title.

      July 2011

    • HC-B.3.4

      "Company" for the purpose of this Module means listed company.

      July 2011

    • HC-B.3.5

      "Connected Party Transactions" means a transaction between the CMSP and a 'connected person'.

      July 2011

    • HC-B.3.6

      "Connected Person(s)" 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 corporation in which the individual or any persons mentioned in (a) has control of not less than 10% of the voting power in the firm or corporation, whether such control is exercised individually or jointly; or
      (c) Connected persons in relation to a firm or corporation means another firm or corporation in which the first-mentioned firm or corporation has control of not less than 10% of the voting power in that other firm or corporation.
      July 2011

    • HC-B.3.7

      "Controlled Functions" means a function carried on by an approved person in relation to a listed company or CMSP that requires prior CBB approval, as per the relevant licensing Module.

      July 2011

    • HC-B.3.8

      "Controlling Shareholder" means any shareholder who holds 10% or more of the share capital or is able to exercise (or control the exercise of) 10% or more of the voting power in the company.

      July 2011

    • HC-B.3.9

      "Executive Director" means a director who is an officer or employee, or is otherwise involved in the day-to-day management of either:

      (a) The company;
      (b) Another company which is a controlling shareholder of the company;
      (c) Another company of which the company is a controlling shareholder; or
      (d) Another company which is controlled by a controlling shareholder.

      In this definition, the word "company" which is a controller of the listed company or CMSP excludes sovereigns such as government owned entities and government ministries.

      July 2011

    • HC-B.3.10

      "Independent Director" means a director whom the board has specifically determined has no material relationship which could affect his independence of judgment, taking into account all known facts. The board should consider that, although a particular director meets the formal requirements, he may not be independent owing to specific circumstances of the person or the company, ownership structure of the company, or for any other reason. The board's determination should be a good faith finding after diligent review and full discussion.

      Formal Requirements — "Independent director" means a director of the company who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the company (not counting director's remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:

      (a) Was not an employee of the company;
      (b) Did not:
      (i) Make to, or receive from, the company payments of more than BD31,000 or equivalent (not counting director's remuneration);
      (ii) Own more than a 5% share or other ownership interest, directly or indirectly, in an entity that made to or received from the company payments of more than such amount;
      (iii) Act as a general partner, manager, director, or officer of a partnership or company that made to or received from the company payments of more than such amount;
      (iv) Have any significant contractual or business relationship with the company which could be seen to materially interfere with the person's capacity to act in an independent manner.
      (c) Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the company;
      (d) Was not engaged directly or indirectly as an auditor or professional adviser for the company; and
      (e) Was not an associate of a director or a member of senior management of the company.

      Volumes 1 and 2 CBB licensees should consult the guidance issued under the definition of "Independent Director" in the Glossary of Volumes 1 and 2 with respect to the CBB's interpretation of the above formal requirements.

      July 2011

    • HC-B.3.11

      "Listed Company" means a company who should have been admitted for trading of the official list of a licensed exchange in Bahrain.

      July 2011

    • HC-B.3.12

      "Non-Executive Director" means any director who is not an Executive Director.

      July 2011

    • HC-B.3.13

      "Overseas Capital Market Service Providers" means a CMSP that is incorporated and operates in an overseas jurisdiction and operates via branch presence, or such other equivalent license, in the Kingdom of Bahrain.

      July 2011

    • HC-B.3.14

      "Remuneration" means all types of compensation including but not limited to salary, fee and non-cash benefits such as grants of stocks, stock options or pension benefits.

      July 2011

    • HC-B.3.15

      "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 of 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.
      July 2011

    • HC-B.3.16

      "Senior Manager/Management" refers to individuals occupying the position of CEO or head of function.

      July 2011

    • HC-B.3.17

      "SRO" means a self-regulatory organisation being a Licensed Exchange, Licensed Market Operator, or a Licensed Clearing House under Module MAE and/or Module CSD respectively.

      July 2011

    • HC-B.3.18

      "Subsidiary" means a company or other enterprise controlled by another company or enterprise (the parent or the holding company).

      July 2011