MIR-2.2 MIR-2.2 Application for License
MIR-2.2.1
Persons wishing to be licensed to undertakeregulated activities within or from the Kingdom of Bahrain must apply in writing to the CBB.Adopted January 2010MIR-2.2.2
Unless otherwise approved by the CBB, the
person undertaking anyregulated activities shall be established as a corporation subject to the Commercial Companies Law 2001.Adopted January 2010MIR-2.2.3
Any applicant must be independent of the SRO to which it wishes to become a member. For the purpose of this section, a person will not be considered independent if:
(a) He owns an interest of 30% or more of equity securities of the SRO or any other company owned by the SRO. In the case of other securities, if he owns a significant interest in the securities of the SRO, or any other affiliated entity; or(b) He has a business relationship with, or financial interest in, the SRO or any other entity in the SRO's group that would give the SRO a material interest in the outcome of the application; or(c) He provides any service, assurance, or guidance in any event to the SRO, or to another entity in the SRO's group; or(d) A director, partner or employee of the applicant or another entity in the applicant's group has a material interest in the SRO or any other entity in the SRO's group.Added: April 2013MIR-2.2.4
Under this Module, a
person may apply to the CBB to be:(1) A licenseddiscount broker ;(2) A licensedbroker ;(3) [Deleted in April 2013];(4) A licensed broker-dealer;(5) A licensed clearingmember ;(6) [Deleted in April 2013];(7) [Deleted in April 2013];(8) An authorisedexternal trading member ; or(9) An authorisedproprietary trading member .Amended: July 2016
Amended: April 2013
Adopted January 2010MIR-2.2.4A
In accordance with Subparagraphs MIR-2.2.4(8) and MIR-2.2.4(9), a person may apply to the
licensed exchange and the CBB to be anexternal trading member (provided it meets the requirements of Paragraph MIR-2.2.8A) or aproprietary trading member (as defined in the Glossary and provided it meets the requirements of Paragraph MIR-2.2.8C).Amended: July 2016
Added: April 2013MIR-2.2.5
The licensed
discount broker may undertake only collecting of the investors orclients order which is required to be executed on thelicensed exchange through a licensedbroker or broker-dealer.Amended: April 2013
Adopted January 2010MIR-2.2.6
The licensed
brokers may undertake:(a) Trading insecurities as agent;(b) Arranging transactions insecurities as an agent.Amended: April 2013
Adopted January 2010MIR-2.2.7
[This Paragraph was deleted in April 2013]
Deleted: April 2013MIR-2.2.8
The licensed broker-dealers may undertake:
(a) Trading insecurities as principal;(b) Trading insecurities as agent;(c) Arranging transactions insecurities as principal and agent;(d) Managing securities' portfolios;(e) Depositing ofsecurities ;(f) Advising on securities businesses;(g) Providing market research and analysis.Amended: April 2013
Adopted January 2010MIR-2.2.8A
An
external trading member accepted for membership by alicensed exchange and authorised by the CBB may undertake only the activities of a licensedbroker or broker-dealer outside the Kingdom of Bahrain. In order to be eligible, the external member must: be a member of an exchange or otherwise licensed and supervised in its home market by a securities regulator that is a signatory to the IOSCO MMOU or acceptable bilateral agreement. Anexternal trading member may not conduct any business within the Kingdom of Bahrain.Amended: July 2016
Added: April 2013MIR-2.2.8B
In order to be authorised by the CBB, an
external trading member must meet the requirements of Paragraph MIR-2.2.11A and submit the application made for membership of thelicensed exchange together with the approval of membership of such exchange. An external trading member's primary regulator and supervisor is thelicensed exchange , of which it is a member and it is not required to comply with the provisions of this Module unless directed to do so by the CBB.An
external trading member is required to conclude the necessary agreements for the clearing and settlement of its transactions conducted on alicensed exchange .External trading members are not eligible to be members of a licensed clearing house or central securities depository.Amended: July 2016
Added: April 2013MIR-2.2.8C
In order to be authorised by the CBB, a
proprietary trading member must submit the application made for membership of thelicensed exchange together with the approval of membership of such exchange. Aproprietary trading member's primary regulator and supervisor is thelicensed exchange , of which it is a member and it is not required to comply with the provisions of this Module unless directed to do so by the CBB.Amended: July 2016
Added: April 2013MIR-2.2.9
The licensed clearing
member (general) may undertake anyregulated activities stipulated under Module CSD in general, and in particular:(a) Facilitating the deposit ofsecurities ;(b) Clearing and settlement ofsecurities transactions as principal;(c) Clearing and settlement ofsecurities transactions as agent;(d) Facilitating registration of dealings in depositedsecurities; (e) Provide custody services to depositedsecurities ;(f) Facilitating netting of transactions in depositedsecurities ;(g) Facilitatingsecurities lending, including repurchase agreements and other economically equivalent transactions;(h) Finality of settlement;(i) Facilitating margin trading; or(j) Ensure achievement of Delivery versus Payment.The
licensed clearing house may restrict itsmembers from undertaking part of the abovementionedregulated activities .Amended: April 2013
Adopted January 2010MIR-2.2.10
The licensed
member may combine two or moreregulated activities , provided these fall within theregulated activities list for theirmember category, and such combinations are not restricted by the CBB orSRO .Amended: July 2016
Amended: April 2013
Adopted January 2010MIR-2.2.11
With the exception of
external trading members andproprietary trading members , an application for a license as amember to undertake any regulated activity under Paragraph MIR-1.1.2 shall be made in Form 1 (Application for Approval as a LicensedMember ) and shall be lodged with the CBB together with:(a) Form 2 (Information on Shareholders and Subsidiaries) and Form 3 (Application for Approved Person Status);(b) Any relevant annex and information specified in those forms;(c) A non-refundable prescribed application fee of BD100 (One Hundred Bahraini Dinars);(d) A business plan setting forth the internal controlling procedures of the enterprise;(e) A business plan containing a budgeted accounting plan for the first three business years;(f) Memorandum and Articles of Association of the corporation, copies of the by-laws, its constitution and powers of management and the manner in which its business is proposed to be undertaken;(g) Policies and procedures forregulated activities undertaken;(h) The proposed organisation structure and the powers and duties of thepersons performing controlled functions of the licensedmember ;(i) A copy of the application submitted to thelicensed exchange orlicensed clearing house , as the case may be and the qualification for membership;(j) A description of the proposed trading, clearing and settlement arrangements;(k) Arrangements for risk management, compliance and internal controls;(l) Whereregulated activities would be outsourced, copies of contracts and arrangements for oversight of their activities; and(m) Arrangements for complying withbusiness rules of thelicensed exchange and/orlicensed clearing house .Amended: April 2013
Adopted January 2010MIR-2.2.11A
Any
licensed exchange , that accepts anexternal trading member , must together with the Final Membership and Commencement of Operation Checklist, provide the CBB with:(a) A copy of the application made to thelicensed exchange for membership as anexternal trading member ;(b) A description of the clearing and settlement arrangements including a copy of the signed contract with a licensed clearing member (general);(c) A copy of theexternal trading member's membership registration certificates with an exchange in its home and any other jurisdiction;(d) A copy of theexternal trading member's licensing or registration with its home market securities regulator (where required to be licensed or registered), which regulator must be a member of IOSCO and a signatory to the IOSCO MMOU or acceptable bilateral agreement; and(e) A letter of confirmation that the CBB Law and this Module are not in conflict with its market rules and legislation and where a conflict is determined, details must be provided for consideration and approval by the CBB.Amended: July 2016
Added: April 2013MIR-2.2.11B
The acceptance as a member of an
external trading member orproprietary trading member by alicensed exchange does not in any way remove the authority of the CBB to supervise and regulateexternal trading members orproprietary trading members in respect of market conduct or to require the provision of any information or records and the CBB reserves its right to compel anexternal trading member orproprietary trading member to comply with CBB rules and regulations at any stage should it deem it necessary.Added: April 2013MIR-2.2.12
The applications to be a licensed
member must include evidence that:(a) Any trading conducted will be provided in an orderly, transparent and fair manner;(b) The licensedmember will be subject to regulation by the CBB and thebusiness rules of theSRO ;(c) The licensedmember has taken adequate measures to prudently manage any risks associated with its business and operations;(d) The licensedmember , in discharging its obligations, will not act contrary to the interests of the investing public, or to the requirements of the CBB;(e) The licensedmember will enforce compliance by its employees or representatives with thebusiness rules of theSRO , as the case may be;(f) The licensedmember makes satisfactory provisions for an orderly, transparent and fair conduct of its business, the adherence to rules and the supervision of its employees or representatives; and(g) The licensedmember has sufficient financial, human, and technical resources to undertakeregulated activities in a fair, orderly, transparent manner and meet contingencies or disaster criteria.Amended: April 2013
Adopted January 2010MIR-2.2.12A
External trading members andproprietary trading members must provide the details in Paragraph MIR-2.2.12 to thelicensed exchange as part of its membership application.Added: April 2013MIR-2.2.12B
A licensed
member may apply to amend its licensing category by application to the CBB's Licensing Directorate by providing only the amended or additional information relevant to the change in regulated activities it intends to undertake.Amended: April 2020
Added: April 2013MIR-2.2.13
The CBB will review the application and duly advise the applicant in writing when it has:
(a) Granted the application without conditions;(b) Granted the application subject to conditions specified by the CBB; or(c) Refused the application, stating the grounds in which the application has been refused and the process for appealing against that decision, unless thelicensed exchange and/orlicensed clearing house refuses to grant its approval, as the case may be.Amended: April 2013
Adopted January 2010MIR-2.2.14
The CBB may, within 30 days from the date of submission, require an applicant to furnish it with amendments or such additional information or documents as the CBB considers necessary in relation to the application.
Amended: April 2013
Adopted January 2010MIR-2.2.15
The CBB may refuse to accept any application if:
(a) It is not completed in accordance with this Module;(b) It is not accompanied by the relevant fee;(c) Thelicensed exchange and/orlicensed clearing house refuse to grant the applicant membership, as the case may be.Amended: April 2013
Adopted January 2010MIR-2.2.16
Where strict compliance with any form is not possible, the CBB may in its sole discretion, and upon request from the applicant to this effect, allow for the necessary modifications to be made to that form, or for the requirements of that form to be complied with in such other manner as the CBB thinks fit.
Amended: April 2013
Adopted January 2010MIR-2.2.17
The applicant may, at any time before a decision has been made about the application, withdraw his application or make amendments to any errors therein or in the supporting documents.
Amended: April 2013
Adopted January 2010Licensing of Members
MIR-2.2.18
The CBB shall decide on the application within 60 days from the date of receiving the application, complete with all the required information and documents.
Amended: April 2013
Adopted January 2010MIR-2.2.19
The CBB may grant an in principle confirmation which does not amount to a license nor commit the CBB to issuing a license within 30 days from the date of the application, following which the applicant may take steps for employment of personnel to the company at his own risk.
Amended: April 2013
Adopted January 2010MIR-2.2.20
The
member shall not undertake anyregulated activities before the CBB grants the license to the applicant.Amended: April 2013
Adopted January 2010MIR-2.2.21
The CBB may license a
person as a licensedmember , subject to such conditions or restrictions as the CBB may think fit to impose by notice in writing, including conditions or restrictions relating to:(a) Theregulated activities that theperson may undertake;(b) Thesecurities or futures contracts or any other products or instruments that a member may undertake; and(c) The class or group of investors and location.Amended: April 2013
Adopted January 2010MIR-2.2.22
The CBB may, at any time, in consultation with the
licensed exchange and/orlicensed clearing house by notice in writing to theperson , vary any condition or restriction or impose such further condition or restriction as it may think fit.Amended: April 2013
Adopted January 2010MIR-2.2.23
A licensed
member shall, for the duration of the license, satisfy all conditions and restrictions that may be imposed on it.Amended: April 2013
Adopted January 2010MIR-2.2.24
Where the CBB rejects an application, the decision and any appeal by the applicant shall be governed by Article 46 of the CBB Law.
Amended: April 2013
Adopted January 2010