• OFS-3.2 OFS-3.2 General Eligibility

    • Incorporation, Licensing and Acceptance

      • OFS-3.2.1

        The appointed advisor must be either incorporated in the Kingdom of Bahrain and licensed by the CBB or authorised to provide this service by the CBB.

        January 2014

      • OFS-3.2.2

        The Memorandum and Articles of Association and/or the by-laws of the advisor must allow it to provide such service.

        January 2014

      • OFS-3.2.3

        Where applicable, the appointed advisor must be incorporated in, be a member, associate or registered with the relevant local, and/or international professional body of a jurisdiction which is a signatory to the IOSCO MMoU.

        January 2014

    • Ability to Provide the Service

      • OFS-3.2.4

        In addition to incorporation and licensing, the CBB will review the ability of the advisor to provide the service. The CBB will consider the following in such determination:

        (a) Historical records and prior performance;
        (b) Maintenance of systems and controls set-up by the advisor; and
        (c) Number of suitably experienced and qualified employees.

        Moreover, advisors' fees and charges should be fixed reasonably in order to ensure that the costs associated with raising capital or initial public offerings are competitive.

        Amended: October 2017
        January 2014

    • Controlled Functions

      • OFS-3.2.5

        All persons proposed to undertake any of the controlled functions must be subject to the provisions and requirements related to these functions, particularly in respect of anti-money laundering and financial crime, the compliance function and any person directly involved in the preparation of the prospectus or offering documents.

        January 2014

      • OFS-3.2.6

        All persons proposed to undertake any controlled functions and any other persons recruited or employed by the capital market advisory service provider must meet the relevant examination and qualification requirements of the CBB, including qualifications such as the Securities Market Regulation Certification Programme (Series 7), the General Securities Representative Qualification (Series 79), and/or any other relevant examinations and qualifications recognised by the CBB that are appropriate to capital market functions, as the case may be. However the CBB reserves the right to impose a higher level of qualifications as it deems necessary.

        Amended: April 2016
        January 2014

      • OFS-3.2.7

        Capital market advisory services providers must maintain and keep records of agreements, contracts, correspondence and other information to demonstrate their compliance with the requirements of this Module. These records must be kept for at least 10 years.

        January 2014

    • Appointment, Change, Termination

      • OFS-3.2.8

        Any appointment of an advisor must be made in the form of a written agreement, contract and/or official letter issued by the issuer or lead manager as applicable.

        January 2014

      • OFS-3.2.9

        The acceptance of the appointment by the advisor must be made in the form of an official written confirmation.

        January 2014

      • OFS-3.2.10

        The name of the appointed advisors must be prominently disclosed in the offering document and in all advertising materials.

        January 2014

      • OFS-3.2.11

        A person appointed to act as an appointed advisor shall not cease to act as such until another has taken office with CBB approval.

        January 2014

      • OFS-3.2.12

        An issuer must notify the CBB in writing immediately of the appointment or dismissal or replacement of an advisor that had been appointed. In the case of a dismissal, the reasons for dismissal must be provided.

        January 2014

    • Transparency and Disclosure

      • OFS-3.2.13

        Where a prospectus or offering document includes a statement purporting to be made by, or based on a statement made by an expert, the prospectus or offering document must not be issued unless:

        (a) The expert has, before the approval and registration of the prospectus or offering document, as the case may be, provided his written consent to the issue thereof; and
        (b) There appears in the prospectus or offering document, a statement that the expert has given such consent.
        January 2014

      • OFS-3.2.14

        The appointed advisor must provide a statement regarding its due diligence with regard to its appointed responsibility and this statement must be included in the prospectus or offering document.

        January 2014

      • OFS-3.2.15

        The appointed advisor must disclose in the prospectus and/or offering documents, whether it has any capital of the issuer under option, or agreed conditionally or unconditionally to be put under option, including:

        (a) The title and amount of securities covered by the options;
        (b) The exercise price;
        (c) The purchase price, if any; and
        (d) The expiration date of the options.
        January 2014

      • OFS-3.2.16

        Where options have been granted, or agreed to be granted to all the holders of shares or debt securities, or of any class thereof, or to any appointed advisor, or to employees under the employees' share benefit plan, a general disclosure of such fact may be made.

        January 2014

      • OFS-3.2.17

        The information provided in Rule OFS-3.2.15 must also be disclosed where there is authorised but unissued capital, or an undertaking to increase the capital in connection with warrants, convertible obligations or other outstanding equity-linked securities, or subscription rights granted or to be granted to any appointed advisor. Such information must indicate:

        (a) The amount of outstanding equity-linked securities and of such authorised capital or capital increase and where appropriate, the duration of the authorisation;
        (b) The categories of advisors having preferential subscription rights for such additional portions of capital;
        (c) The terms, arrangements and procedures for the share issue corresponding to such portions; and
        (d) That no subscription is made by the issuer in contravention of Subparagraph OFS-1.5.2(s).
        January 2014

      • OFS-3.2.18

        In regard to the implementation of the granting of capital in Paragraphs OFS-3.2.15 and OFS-3.2.17:

        (a) The General Assembly of the securities holders must approve a separate resolution of the rights or options through a majority of disinterested securities holders;
        (b) It must be implemented, exercised and/or allocated separately from the process of the related offering of securities, i.e. either before or after the offering period; and
        (c) For issuers under formation, the implementation, exercising and or allocation of the required securities must take place only after the publication of the issuer's incorporation order in the Official Gazette.
        January 2014

    • Independency and Avoidance of Conflict of Interest

      • OFS-3.2.19

        An appointed advisor must be independent of the issuer. An appointed advisor will not be considered independent by the CBB if:

        (a) He owns an interest of 5% or more of equity securities of the issuer or any other company within the issuer's group;
        (b) He has a business relationship with, or financial interest in the issuer or any other entity in the issuer's group that would give the appointed advisor, or the appointed advisor's group a material interest in the outcome of the transaction;
        (c) He provides and has provided in the previous 2 years any service, assurance, or guidance in any event to the issuer, other than the offering or listing in which he is appointed as an appointed advisor, or to another entity in the issuer's group; or
        (d) A director, partner or employee of the appointed advisor or another entity in the appointed advisor's group has a material interest in the issuer or any other entity in the issuer's group.
        Amended: July 2018
        January 2014

      • OFS-3.2.20

        When an appointed advisor undertakes business other than the capital market advisory services, or undertakes two or more of the capital market advisory services, the appointed advisor must ensure that the performance of such business is subject to the avoidance of any conflict of interest.

        January 2014

    • Confidentiality and Prohibition of Insider Trading

      • OFS-3.2.21

        Appointed advisors are subject to confidentiality requirements which must be explicitly stated in the respective agreements, contracts and/or letters.

        January 2014

      • OFS-3.2.22

        All advisors must abide by the rules relating to the Prohibition of Market Abuse and Manipulation contained in Module MAM of Volume 6 CBB Rulebook, as well as the relevant rules of the licensed exchange regarding the prevention of insider trading, in their capacity as a temporary insider.

        January 2014

    • Reporting and Notification to the CBB

      • OFS-3.2.23

        An appointed advisor is responsible, in addition to the reporting and disclosure requirements stipulated under this Module, for immediate notification to the CBB of any offence involving money laundering, fraud, theft, or other dishonest conduct related to the offer or listing, irrespective of whether such conduct is reported to the CBB by the issuer and/or the lead manager.

        January 2014

    • Declaration and Accountability

      • OFS-3.2.24

        An appointed advisor is required to provide the CBB with a declaration confirming his acceptance to the accountability and enforceability of the CBB Law, rules and regulations, and all other applicable laws, rules and regulations, and in particular to the CBB Law Articles 82, 84, 85, 106, 166, 167 and 168.

        January 2014

    • CBB Approval

      • OFS-3.2.25

        The CBB shall decide on the eligibility of the appointed advisor(s) on a case by case basis, taking into consideration, the nature and complexity of the offering, as well as, the nature of involvement and commitment of the appointed advisor(s).

        January 2014