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  • Prior Approval Requirements and Process

    Contents:

    •    CSD-5.3.1
    •    CSD-5.3.2
    •    CSD-5.3.3
    •    CSD-5.3.4
    •    CSD-5.3.5
    •    CSD-5.3.6
    •    CSD-5.3.7

    • CSD-5.3.1

      Licensees must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in a licensee. The approval from the CBB must be obtained prior to their appointment.

      Amended: April 2016
      Amended: April 2013

    • CSD-5.3.2

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

      (a) Board member;
      (b) Chief Executive or General Manager;
      (c) Head of function;
      (d) Compliance Officer; and
      (e) Money Laundering Reporting Officer (MLRO).
      Amended: April 2016
      Amended: April 2013

    • CSD-5.3.2A

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

      (a) Head of clearing;
      (b) Head of settlement;
      (c) Head of netting;
      (d) Head of central depository;
      (e) Head of central registry;
      (f) Head of risk management; and
      (g) Head of other functions.
      Added: April 2016

    • CSD-5.3.2B

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

      Added: April 2016

    • CSD-5.3.2C

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

      Added: April 2016

    • CSD-5.3.3

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

      Amended: April 2013

    • CSD-5.3.4

      All persons wishing to undertake any of the controlled functions shall be subject to the fit and proper requirements.

      Amended: April 2013

    • CSD-5.3.5

      In accordance with Subparagraph CSD-5.3.2(d), every licensed clearing house or licensed central depository must appoint a compliance officer. The compliance officer is responsible for discharging the obligations of the licensee.

      Amended: April 2016
      Amended: April 2013

    • CSD-5.3.6

      In accordance with Paragraph CSD-5.3.5:

      (a) The Compliance Officer should be competent and knowledgeable regarding the CBB Law, rules and regulations, as well as the various applicable Volume 6 Modules;
      (b) The Compliance Officer shall:
      (i) Monitor the transactions undertaken by the member, its representatives, or participants;
      (ii) Identify disorderly transactions or conduct that may involve market abuse or disruption;
      (iii) Identify any breach of CBB Law, rules and regulations; and
      (iv) Identify any breach of the rules of the SRO.
      Amended: April 2013

    • CSD-5.3.7

      The Compliance Officer shall on the identification of any breach referred to in Subparagraph CSD-5.3.6(b), report such breach to the CBB without delay for the investigation and shall provide full assistance to the latter in investigating the conduct occurring on or through the licensed clearing house or licensed central depository.

      Amended: April 2016
      Amended: April 2013

    • CSD-5.3.7A

      The request for CBB approval must be made by submitting to the CBB a duly completed Form 3 (Application for Approved Person status) and Curriculum Vitae after verifying that all the information contained in the Form 3, including previous experience, is accurate. Form 3 is available under Volume 6 Part B Authorisation Forms CSD Forms of the CBB Rulebook.

      Added: April 2016

    • CSD-5.3.7B

      When the request for approved person status forms part of a license application, the Form 3 must be marked for the attention of the Director, Licensing Directorate. When the submission to undertake a controlled function is in relation to an existing licensee, the Form 3 must be marked for the attention of the Director, Capital Markets Supervision. In the case of the MLRO, Form 3 should be marked for the attention of the Director, Compliance Directorate.

      Amended: April 2018
      Added: April 2016

    • CSD-5.3.7C

      When submitting Form 3, licensees must ensure that the Form 3 is:

      (a) Submitted to the CBB with a covering letter signed by an authorised representative of the licensee, seeking approval for the proposed controlled function;
      (b) Submitted in original form;
      (c) Submitted with a certified copy of the applicant's passport, original or certified copies of educational and professional qualification certificates (and translation if not in Arabic or English) and the Curriculum Vitae; and
      (d) Signed by an authorised representative of the licensee and all pages stamped on with the licensee's seal.
      Added: April 2016

    • CSD-5.3.7D

      For existing licensees applying for the appointment of a Board Director or the Chief Executive/General Manager, the authorised representative should be the Chairman of the Board or a Director signing on behalf of the Board. For all other controlled functions, the authorised representative should be the Chief Executive/General Manager.

      Added: April 2016