• OFS-1.5 OFS-1.5 General Requirements for the Issuing of Securities

    • OFS-1.5.1

      The following general requirements for issuing of securities represent the minimum requirements applicable to all issuers and/or all types of offers. The CBB reserves the right to add to, amend or vary such requirements, depending on the nature of the issuer and/or the offering to be made. Specific exemptions may be granted to small and medium enterprises.

      January 2014

    • OFS-1.5.2

      The issuers of any securities in the Kingdom of Bahrain must meet the following general requirements:

      (a) Be incorporated or in the process of applying to be incorporated, in accordance with the applicable laws, rules and regulations;
      (b) Have produced or will produce audited financial statements in accordance with the International Financial Reporting Standards (IFRS), Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), or other accounting standards acceptable to the CBB. If the financial statements have not been prepared in accordance with IFRS, AAOIFI or other accounting standards acceptable to the CBB, the issuer must restate the financial statements in accordance with IFRS or AAOIFI, as the case may be;
      (c) Its annual financial statements must be audited in accordance with the international auditing standards issued by International Auditing Practices Committee of the International Federation of Accountants;
      (d) Its interim financial statements must be reviewed and be in accordance with OFS-1.5.2(b);
      (e) Provide to the CBB an appropriate confirmation and evidence and disclose in the offering document that there has been no material adverse change in the financial condition of the issuer (or the guarantor, in the case of a guaranteed issue) since the end of the period last reported on by the external auditor;
      (f) Appoint an eligible CBB Licensee as receiving bank and paying agent that is approved by the CBB;
      (g) Its appointed capital market advisory services providers (CMSPs) must meet the requirements of this Module and/or other requirements imposed in this respect by the CBB;
      (h) May not allocate or allot any securities without meeting the CBB's requirements for that type of securities offering with respect to the final allocation or allotment;
      (i) Must ensure that they adhere to the utilisation of proceeds statement in the prospectus and obtain the securities holders consent and CBB prior approval for any alteration thereto;
      (j) When considering the currency of issue, that it may issue securities denominated in Bahraini Dinars, currencies of the Gulf Cooperation Council (GCC) or United States Dollars (US$) and other international currencies on approval of the CBB;
      (k) Should ensure conflicts of interest do not arise during either the issuing of securities or through the offering and relevant appointments or transactions;
      (l) Must protect and act in the interests of securities holders;
      (m) Must provide equal treatment to all securities subscribers and/or holders for each issue of securities. No discrimination among subscribers and/or holders in any form or by any means may be made by the issuer. Special attention of the issuer in this context shall be drawn particularly to the subscription or offer price of the securities;
      (n) Must adhere to the issuing timetable contained in its offering documents, or as amended upon the CBB approval;
      (o) The issuer and appointed CMSPs must fulfil all obligations in their respective capacities in accordance with the signed written agreements concluded between them in respect of the issue and must provide a written declaration of due diligence in respect of their obligation within the offering document;
      (p) The founders, promoters, or the Board of Directors of the issuer must confirm in writing to the CBB that it is responsible for complying with the CBB Law, rules and regulations and any other applicable laws, rules and regulations in accordance with the CBB's standard statement;
      (q) The founders, promoters, or the Board of Directors of the issuer must not establish any restrictions on the rights of the securities holders not provided for in law, particularly regarding voting and granting of proxy to any eligible person(s) (no irrevocable proxies or any term of issue subject to a grant of proxy will be permitted);
      (r) Any special purpose vehicle acting as an issuer and used in the securitisations of assets located in the Kingdom of Bahrain must be incorporated as a company under the laws of the Kingdom of Bahrain;
      (s) All issues of securities must be in response to the receipt of consideration (cash or in kind). An issuer may not offer a substitution of one investment for another unless such subsitution is part of an approved corporate event conducted on a licensed exchange; and
      (t) The securities issued by the issuer must have a registered International Securities Identification Number (ISIN) issued by a national numbering agent.
      January 2014

    • OFS-1.5.3

      In addition to the requirements of Paragraph OFS-1.5.2, and in order to meet the general requirements the issuer must:

      (a) Submit to the CBB the draft or final, duly signed Memorandum and Articles of Association;
      (b) Submit all the relevant information in due time and form as required under this Module;
      (c) Submit to the CBB all attachments with its application including the required declarations, as stipulated under this Module;
      (d) Appoint its relevant advisors for the purposes of its application, as required under this Module and disclose these to the CBB;
      (e) Confirm that it will comply with all the "fit and proper" provisions contained in the relevant Bahraini Corporate Governance Code and Module HC (Corporate Governance) Volume 6, as applicable;
      (f) Confirm that it will adhere to its ongoing obligations and the disclosure requirements; and
      (g) Submit to the CBB at least 2 independent valuation reports in respect of the assets used as underlying assets for asset backed securities being issued or offered.
      January 2014

    • OFS-1.5.4

      The founders of the public shareholding company or listed company are not entitled to dispose of their shareholding for a period of 1 year, starting from the date of listing on a licensed exchange.

      January 2014

    • OFS-1.5.5

      Unless otherwise permitted by the CBB, securities issued after the effective date of this Module must be in dematerialised form and the issuer is required to designate the clearing house, or depository facilities in which such securities are deposited.

      January 2014

    • OFS-1.5.6

      All securities issued under this Module must be in registered form and no bearer securities may be issued without CBB permission.

      January 2014

    • OFS-1.5.7

      The issuer or any person acting on its behalf or providing any services to the issue is prohibited to use any part of the proceeds of the issue before the issuer is fully incorporated and the proceeds are placed with the Board of Directors.

      January 2014

    • OFS-1.5.8

      Issuers and market participants are required to adhere to the fees and charges imposed oulined in Chapter OFS-8, or as required by the CBB from time-to-time.

      January 2014