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  • OFS-5 OFS-5 Offering Documents

    • OFS-5.1 OFS-5.1 Prospectus Requirements

      • OFS-5.1.1

        A prospectus must be drawn up for every offer of securities. The prospectus must contain the minimum information requirements set out in Sections OFS-5.2 to OFS-5.10 and in this Module and must be submitted to the CBB for approval.

        January 2014

      • OFS-5.1.2

        Issuers of securities, depending on the industry that the issuer is involved in (e.g. engaged in specialised industries (i.e. banking, insurance, mining, telecommunications and oil and gas companies as well as any other specialised industries), are required to provide additional information as directed by the CBB.

        Amended: October 2017
        January 2014

      • Material Information

        • OFS-5.1.3

          The issuer must disclose any information that would be material to an investor's investment decision.

          January 2014

        • OFS-5.1.4

          In addition to the information prescribed under this Module, a prospectus must include all such information within the knowledge of those preparing the prospectus so that investors may make an informed assessment.

          January 2014

        • OFS-5.1.5

          It is the responsibility of each issuer and lead manager to determine the material information:

          (a) According to the particular nature of its own affairs and the nature and type of securities for which an offering or listing is sought;
          (b) Necessary to enable a person who invests or seeks to invest in securities to make an informed assessment of the activities, assets, liabilities, financial position, management and prospects of the issuer, and of its profits and losses and the rights attached to such securities; and
          (c) The implicit risk associated with such investment.
          January 2014

        • OFS-5.1.6

          For the purpose of Paragraph OFS-5.1.5, material information consists of both material facts and material changes related to the business and affairs of the issuer, taking into account qualitative and quantitative facts, developments and events capable of influencing the offering or market price or value of issued securities.

          January 2014

      • Omission of Information

        • OFS-5.1.7

          If a disclosure requirement is not applicable to an issuer's sphere of activity or legal form, no information need be provided in response to that requirement, although equivalent information must be given.

          January 2014

        • OFS-5.1.8

          For purposes of Paragraph OFS-5.1.7, the CBB may authorise the omission of information from the prospectus if it considers that:

          (a) Such information is of minor importance only and as such, will not influence the assessment of the activities, assets, liabilities, financial position, profits and losses, or implicit risks and prospects of the issuer;
          (b) Such information required in the prospectus represents a competitive advantage for the issuer, and its disclosure could affect its financial situation or operating results; or
          (c) Disclosure of such information would be contrary to the public interest, or be seriously detrimental to the issuer, provided that such an omission would not be likely to mislead the public with regard to facts and circumstances, knowledge of which is essential for the assessment of the securities in question.
          January 2014

        • OFS-5.1.9

          To be granted the right to omit information as noted in Paragraph OFS-5.1.8, the issuer must obtain the CBB's authorisation by explaining in writing to the CBB the reasons for not making information public.

          January 2014

      • Replacement and Supplementary Document

        • OFS-5.1.10

          A supplementary or replacement prospectus is a prospectus that has the same wording as the original prospectus, except for the provision of new or additional information, or the correction of deficiencies in the original prospectus.

          January 2014

        • OFS-5.1.11

          A supplementary or replacement prospectus must be submitted to the CBB as soon as practicable if, during the validity period of a prospectus, the issuer becomes aware that the prospectus is deficient or outdated in that:

          (a) The prospectus contains a material statement that is false or misleading;
          (b) There is a material omission from the prospectus;
          (c) There has been a significant change affecting information in the prospectus; or
          (d) A significant new matter has arisen, and the prospectus content requirements would have required information on that matter to have been included in the prospectus, if the matter had arisen when the prospectus was being prepared.
          January 2014

        • OFS-5.1.12

          The supplementary and/or replacement prospectus must be approved by the CBB and published in summary form in accordance with Article 81(b) of the CBB Law.

          January 2014

        • OFS-5.1.13

          The supplementary or replacement prospectus may be used to correct, update or add to the original prospectus at any time before the date of the CBB approval and/or start of the offering period.

          January 2014

        • OFS-5.1.14

          All supplementary or replacement prospectuses must contain the following:

          (a) A statement that it is a supplementary or replacement prospectus;
          (b) An identification of the prospectus it supplements or replaces;
          (c) An identification of any previous supplementary or replacement prospectus in relation to the same offer;
          (d) A statement that it is to be read together with the prospectus, as well as any previous supplementary or replacement prospectus; and
          (e) A responsibility statement from the board of directors of the issuer.
          January 2014

        • OFS-5.1.15

          All supplementary and/or replacement prospectuses must clearly indicate the changes and revisions made.

          January 2014

        • OFS-5.1.16

          For purposes of Paragraph OFS-5.1.15, such changes must be made clear in all copies provided to the CBB and the investing public.

          January 2014

      • CBB Approval

        • OFS-5.1.17

          Application for approval for any changes to the prospectus must be accompanied by the following:

          (a) The supplementary and/or replacement prospectus containing at least the minimum information set out in this Module;
          (b) A declaration by the issuer and the lead manager that the changes to the supplementary and/or replacement prospectus are free from false or misleading statements, or information biased towards any of its present shareholders and future investors;
          (c) A declaration by the issuer and the lead manager that the changes to the supplementary and/or replacement prospectus do not omit any material information; and
          (d) A declaration by the issuer and the lead manager that the changes to the supplementary and/or replacement prospectus are to the best of their knowledge in accordance with all the applicable laws, rules and regulations.
          January 2014

      • Announcement

        • OFS-5.1.18

          For public offers, the issuer must inform the public of the changes and make the supplementary and/or replacement prospectus available to it. In accordance with Article 84 of CBB Law of 2006, issuers of securities must publish a summary of the supplementary and/or replacement prospectus in two daily local newspapers, one in Arabic and the other in English and disclose the material amendments therein.

          January 2014

      • Equivalent Information

        • OFS-5.1.19

          For Bahraini issuers who made an offer or listed their securities outside Bahrain, and for overseas issuers who made an offer or listed their securities in Bahrain, all information of importance to shareholders made public about the issuer in other markets must be made public in Bahrain, whether or not disclosure of such information would otherwise be required by the CBB.

          January 2014

      • Presentation

        • OFS-5.1.20

          Although the information sections and order of presentation are not mandatory, the CBB recommends that the format of the standards outlined in this Module be followed to enhance comparability. If the same information required by this Module is also required by the body of accounting principles used in preparing financial statements, the information need not be repeated, as long as there is a cross-reference to the location of the information. It is also recommended that a table of contents be provided at the beginning of the document.

          January 2014

      • Validity of the Offering Document

        • OFS-5.1.21

          The prospectus must remain valid for a maximum period of six months from the date of notification of the CBB approval. After this period no person shall offer securities based on such prospectus, unless approved by the CBB.

          January 2014

      • Preliminary or Red Herring Prospectuses

        • OFS-5.1.22

          When a draft prospectus is submitted to the CBB or to any appointed advisor, the final offering price is not required to be disclosed. The offering price must however be included in the final printed proof prospectus and before the start of the offering period is set.

          January 2014

      • Responsibility for Offering Document

        • OFS-5.1.23

          In accordance with Article 85 of the CBB Law, the person responsible for the preparation of the prospectus must ensure that it is free of incorrect or misleading information. Furthermore, Article 166 (b) makes it an offence to intentionally include false or misleading information and that the responsible persons may, subject to any greater penalty under the penal code, be punished by imprisonment or a fine not exceeding BD3,000.

          January 2014

        • OFS-5.1.24

          The following persons are responsible for the reliability and accuracy of the prospectus or offering documents:

          (a) The issuer of the securities covered by the prospectus;
          (b) The board of directors of the issuer of the securities;
          (c) The lead manager of the securities offered; and
          (d) Any other appointed advisor or person whose name appears in the prospectus or offering document each in their respective capacity according to the declaration made by him.
          January 2014

      • Consent and Declaration

        • OFS-5.1.25

          The issuer and/or lead manager must obtain confirmation and/or consent letters from the appointed advisors or experts acknowledging their responsibilities and obligations under Article 85 of the CBB Law of 2006.

          January 2014

      • Registration and Publication

        • OFS-5.1.26

          If the prospectus is approved by the CBB subject to changes, the final corrected copy must be registered with the CBB within 24 hours prior to the date of commencement of the offering period.

          January 2014

      • Documents Available for Inspection

        • OFS-5.1.27

          The prospectus must be attached with all agreements, contracts, arrangements and documents required under this Module, or as referred to in the prospectus as being available for inspection.

          January 2014

      • Preparation of the Prospectus

        • OFS-5.1.28

          The issuer, lead manager, or any other appointed advisors or persons involved in the preparation of any offering documents must ensure that the content and the statements included in such documents will meet, but not be limited to the following requirements:

          (a) The prospectus and all statements included therein must be factual, clear and succinct;
          (b) Must be balanced and fair;
          (c) Must contain sufficient quantitative information to allow investors to make informed decisions regarding their participation in the offer;
          (d) Must avoid any omission of important and favourable facts, or minimising such facts by "burying" them at the end of the related statement or at the end of a section of information, or provided as an appendix to the prospectus, instead of including such facts in the main body of the prospectus;
          (e) Must not include a presentation of estimates, projections, forecasts, or forward looking statements or overviews, without sufficient qualification, or without a sufficient factual basis;
          (f) Must not include any promotional jargon calculated to excite rather than to inform;
          (g) Must avoid using negative statements phrased so as to create a positive implication like "The company cannot now predict whether the development will have a materially favourable effect on its earnings," (creating the implication that the effect will be favourable even if not materially favourable), or "The company expects that the development will not have a materially favourable effect on earnings in the immediate future," (creating the implication that the development will eventually have a materially favourable effect);
          (h) Must avoid over-technical language, and where possible, use language comprehensible to laymen; and
          (i) Must avoid presentation of providing information in the form of diagrams and charts, without first presenting the same information in the form and style of written statements.
          January 2014

        • OFS-5.1.29

          For the purpose of Paragraph OFS-5.1.28, unwarranted promotional information means disclosing information beyond that necessary to inform investors and used only as an attempt to influence potential subscribers.

          January 2014

        • OFS-5.1.30

          In order to meet the requirements under Paragraphs OFS-5.1.31 and OFS-5.1.32, the contents of the prospectus and statement therein should either be prepared, reviewed, or edited by the legal advisor or other related appointed advisors, depending on the importance and complexity of the concerned contents or statement.

          January 2014

      • Use of Prospectus

        • OFS-5.1.31

          No person shall use any offering document unless:

          (a) It has been submitted to and approved by the CBB and published; and
          (b) Where required, a summary of the offering document has been published in one Arabic and one English language daily newspaper published in Bahrain.
          January 2014

    • OFS-5.2 OFS-5.2 Contents of the Prospectus

      • Specific Content for Equity Securities

        • OFS-5.2.1

          An offering document in respect of equity securities must contain the minimum content requirements of this Section and be prepared in accordance with Appendix 1.

          January 2014

      • Front Cover Page

        • OFS-5.2.2

          Front cover page: The cover page of the offering document must contain the following particulars:

          (a) Full name and registration number of the issuer;
          (b) Type and amount of securities;
          (c) Date of the offering document;
          (d) Date of expiry of validity of the prospectus;
          (e) Logo and full name of each advisor;
          (f) Logo and full name of the lead manager and co-managers;
          (g) Logo and name of the underwriter, if any;
          (h) Face or par value of the securities;
          (i) Offer price;
          (j) Premium (if applicable);
          (k) Placement fee or charge (if applicable);
          (l) Minimum subscription limit (if applicable);
          (m) Maximum subscription limit (if applicable);
          (n) Eligible subscribers (general classification by nationality or region); and
          (o) Standard disclaimer statement, written in capital letters and box framed, as follows:
          THE CENTRAL BANK OF BAHRAIN AND [NAME OF THE LICENSED EXCHANGE] ASSUME NO RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THE STATEMENTS AND INFORMATION CONTAINED IN THIS DOCUMENT AND EXPRESSLY DISCLAIM ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT.
          January 2014

        • OFS-5.2.3

          If the offer is planned to be issued in any other jurisdiction or is planned to be listed on any other regulated exchange(s) then the name of the securities regulator of such jurisdiction and/or the name of the other regulated exchange may be added to the above disclaimer statement, if such regulator or regulated exchange has the same or equivalent requirement.

          January 2014

        • OFS-5.2.4

          The CBB will not permit any change, alteration, modification, reduction and/or addition in the above disclaimer statement, other than the cases mentioned under Paragraph OFS-5.2.3.

          January 2014

      • Inside Cover Page

        • OFS-5.2.5

          The prospectus must include on the inside cover page the following standard prominent and legible declaration and responsibility statement within a box frame:

          THE DIRECTORS OF THE COMPANY, WHOSE NAMES APPEAR HEREIN, ACCEPT RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS DOCUMENT. TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, THE DIRECTORS, WHO HAVE TAKEN ALL REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE, THE INFORMATION CONTAINED IN THIS DOCUMENT IS IN ACCORDANCE WITH THE FACTS AND CONTAINS NO OMISSIONS LIKELY TO AFFECT THE IMPORTANCE AND COMPLETENESS OF THE DOCUMENT.
          January 2014

        • OFS-5.2.6

          The abovementioned standard responsibility statement must be duly signed by the issuer's board of directors.

          January 2014

        • OFS-5.2.7

          The standard responsibility statement must be produced in the prospectus and the same must be submitted to the CBB.

          January 2014

        • OFS-5.2.8

          The CBB will not normally accept any board of directors responsibility statement, unless it is duly signed by all directors. In cases where one or more of the directors cannot provide their signature on such statement, the issuer is required to provide to the CBB and disclose in the prospectus itself the actual reasons and justification.

          January 2014

        • OFS-5.2.9

          In addition to the information required to be included on the front and inside cover pages of the prospectus, the prospectus must contain, at the minimum, the following information:

          (a) Important Notice - which may include:
          (i) Important notice to subscribers;
          (ii) Due diligence statements;
          (iii) Forward looking statements; and
          (iv) General risk statement;
          (b) Applicants Identification and Anti-Money Laundering requirement;
          (c) Table of contents;
          (d) Glossary of the defined terms and abbreviations;
          (e) Offering timetable;
          (f) Resolutions and approvals;
          (g) Summary of the offering;
          (h) Offering statistics and expected timetable;
          (i) Information on the issuer, which may include:
          (i) Background and history;
          (ii) Principal activities;
          (iii) Business strategy;
          (iv) Organisational structure;
          (v) Corporate governance practices;
          (vi) Board of Directors
          (vii) Board of Directors practices;
          (viii) Senior management team;
          (ix) Employees;
          (x) Compensation;
          (xi) External auditor;
          (xii) Legal advisor and other advisors;
          (xiii) Major shareholders and transactions;
          (xiv) Related party transactions;
          (xv) Interests of experts and counsel;
          (xvi) Material contracts;
          (xvii) Business overview;
          (xviii) Key financial information;
          (xix) Operating and financial review and prospects;
          (xx) Property, plant and equipment;
          (xxi) Research and development, patents and licenses;
          (xxii) Significant assets and liabilities;
          (xxiii) Liquidity and capital resources;
          (xxiv) Consolidated financial statements;
          (xxv) Material changes to financial statements;
          (xxvi) Restatement of financial statements;
          (xxvii) Ratios and analysis;
          (xxviii) Projections of financial statements; and
          (xix) Subsidiary's separate financial statements;
          (j) Industry analysis which may include:
          (i) Economic overview;
          (ii) Sectoral performance and overview; and
          (iii) Sub-sectoral performance and overview;
          (k) Investment considerations, which may include:
          (i) Equity securities' rights and obligations;
          (ii) Ranking of shares;
          (iii) Dividend policy;
          (iv) Listing of shares;
          (v) Description of the offering;
          (vi) Underwriting arrangements;
          (vii) Commitments to the offering arrangements;
          (viii) Contracts or arrangements with the appointed advisor;
          (ix) Expenses of the issue;
          (x) Use of proceeds; and
          (xi) Dilution;
          (l) Risk factors, which may include:
          (i) General risks;
          (ii) Business risks;
          (iii) Legal and regulatory risks; and
          (iv) Other specific risks;
          (m) Disputes, litigations and court orders;
          (n) Subscription terms and conditions, which may include:
          (i) Application procedures;
          (ii) Subscription restrictions;
          (iii) Subscription period;
          (iv) Receiving banks;
          (v) Mode of payment;
          (vi) Fund transfer fees and charges;
          (vii) Rejected applications;
          (viii) Allotment;
          (ix) Over-subscription allotment;
          (x) Dispatching and refunds; and
          (xi) Announcements and acknowledgements;
          (o) Additional information, which may include:
          (i) Share capital structure; and
          (ii) Memorandum and Articles of Association;
          (p) Applicable law;
          (q) Documents available for inspection; and
          (r) Appendices.
          January 2014

    • OFS-5.3 OFS-5.3 Additional and Specific Content for Debt Securities

      • OFS-5.3.1

        An offering document in respect of debt securities must contain the minimum content requirements of this section and be prepared in accordance with Appendix 3.

        January 2014

      • Front Cover Page

        • OFS-5.3.2

          Front cover page:

          The cover page of the debt securities offering document must contain the following particulars:

          (a) Full name and registration number of the issuer;
          (b) Full name and registration number of the originator;
          (c) Logo and full name of the guarantor, if any;
          (d) Type and amount of debt securities;
          (e) Date of the offering document;
          (f) Date of the expiry of the validity of the prospectus;
          (g) Logo and full name of each advisor;
          (h) Logo and full name of the lead manager, primary dealer, issuing house;
          (i) Logo and full name of co-managers;
          (j) Logo and name of the underwriter, if any;
          (k) Logo and full name of the trustee;
          (l) Rating of debt securities, if any;
          (m) Face or par value;
          (n) Offer price;
          (o) Premium (if applicable);
          (p) Placement fee or charge (if applicable);
          (q) Minimum subscription limit (if applicable);
          (r) Maximum subscription limit (if applicable);
          (s) Eligible subscribers (general classification by nationality or region); and
          (t) Standard disclaimer statement, written in capital letters and box framed, as follows:

          THE CENTRAL BANK OF BAHRAIN AND [NAME OF LICENSED EXCHANGE] ASSUME NO RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THE STATEMENTS AND INFORMATION CONTAINED IN THIS DOCUMENT AND EXPRESSLY DISCLAIM ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT.
          January 2014

      • Inside Cover Page

        • OFS-5.3.3

          The offering document must include on the inside cover page the standard prominent and legible declaration and responsibility statement within a box frame:

          THE DIRECTORS OF THE COMPANY, WHOSE NAMES APPEAR HEREIN, ACCEPT RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS DOCUMENT. TO THE BEST OF THEIR KNOWLEDGE AND BELIEF, THE DIRECTORS, WHO HAVE TAKEN ALL REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE, THE INFORMATION CONTAINED IN THIS DOCUMENT IS IN ACCORDANCE WITH THE FACTS AND CONTAINS NO OMISSIONS LIKELY TO AFFECT THE IMPORTANCE AND COMPLETENESS OF THE DOCUMENT.
          January 2014

        • OFS-5.3.4

          The abovementioned standard responsibility statement must be duly signed by the issuer's/originator's board of directors.

          January 2014

        • OFS-5.3.5

          The standard responsibility statement must be produced in the offering document and the same must be submitted to the CBB.

          January 2014

        • OFS-5.3.6

          The CBB will not normally accept any board of directors' responsibility statement unless it is duly signed by all directors. In cases where one or more of the directors cannot provide their signature on such statement, the issuer is required to provide to the CBB and disclose in the offering document itself, the actual reasons and justifications.

          January 2014

        • OFS-5.3.7

          In addition to the information required to be included on the front and inside cover pages of the prospectus or offering documents, the offering documents of debt securities must contain, at the minimum, the following sections of information:

          (a) Important Notice - which may include:
          (i) Important notice to subscribers;
          (ii) Due diligence statements;
          (iii) Forward looking statements; and
          (iv) General risk statement;
          (b) Applicants Identification and Anti-Money Laundering requirement;
          (c) Table of contents;
          (d) Glossary of the defined terms and abbreviations;
          (e) Offering timetable;
          (f) Resolutions and approvals;
          (g) Summary of the offering;
          (h) Offering statistics and expected timetable;
          (i) Structural overview of the securitisation transaction:
          (i) Summary of transaction;
          (ii) Transaction overview diagram;
          (iii) Cash flow description;
          (iv) Cash inflow;
          (v) Monthly instalment;
          (vi) Cash outflow;
          (vii) Issuance cost;
          (viii) Annual expenses;
          (ix) Delinquencies and defaults;
          (x) Investment parameters for the investment of temporary liquidity surpluses;
          (xi) Source of payments;
          (xii) Order of priority of payments;
          (xiii) Fees payable;
          (xiv) Sale of the underlying assets;
          (xv) Nature of the sale;
          (xvi) Terms of the sale;
          (xvii) Underlying assets;
          (xviii) Purchase consideration;
          (xix) Cancellation;
          (xx) Debt securities issuance;
          (xxi) Partial early redemption;
          (xxii) Mandatory redemption in full;
          (xxiii) Formula for optional/mandatory redemption in full;
          (xxiv) Debt securities redemption table;
          (xxv) Servicing function;
          (xxvi) Servicing by the originator;
          (xxvii) Servicing of the debt securities by the issuer; and
          (xxviii) Utilisation of proceeds;
          (j) The following minimum information must be provided for:
          (i) Details of the issuer (for all issues);
          (ii) Details of the originator (if different from the issuer);
          (iii) Details of the guarantor (for all guaranteed issues):
          •   Background and history;
          •   Principal activities;
          •   Business strategy;
          •   Organisational structure;
          •   Corporate governance practices;
          •   Board of Directors
          •   Board of Directors practices;
          •   Senior management team;
          •   Employees;
          •   Compensation;
          •   External auditor;
          •   Legal advisor and other advisors;
          •   Major shareholders and transactions;
          •   Related party transactions;
          •   Interests of experts and counsel;
          •   Material contracts;
          •   Business overview;
          •   Key financial information;
          •   Operating and financial review and prospects;
          •   Significant assets and liabilities;
          •   Property, plant and equipment;
          •   Research and development, patents and licenses;
          •   Liquidity and capital resources;
          •   Consolidated financial statements;
          •   Material changes to financial statements;
          •   Restatement of financial statements;
          •   Ratios and analysis;
          •   Projections of financial statements; and
          •   Subsidiary's separate financial statements;
          (k) Industry analysis which may include:
          (i) Economic overview;
          (ii) Sectoral performance and overview; and
          (iii) Sub-sectoral performance and overview;
          (l) Investment considerations, which may include:
          (i) Limited recourse;
          (ii) The debt securities;
          (iii) No prior market for the debt securities;
          (iv) Market value of the debt securities;
          (v) Fluctuation of interest rates;
          (vi) Inflation risks;
          (vii) Partial early redemption of the debt securities;
          (viii) Legal investment considerations;
          (ix) Investment in the debt securities may not be suitable for all investors;
          (x) The underlying assets;
          (xi) Timeliness of collections;
          (xii) Conditions of the sector/sub-sector/market;
          (xiii) Obligor's obligations;
          (xiv) No perfection of the issuer's interests in the underlying assets;
          (xv) No assurance on conformity with eligibility criteria;
          (xvi) Reliance on the servicer;
          (xvii) Rescheduling of payment obligations;
          (xviii) Replacement of servicer and transaction administrator;
          (xix) The issuer;
          (xx) Bankruptcy risk;
          (xxi) Dependence on key personnel;
          (xxii) No recourse to shareholder;
          (xxiii) No operational history;
          (xxiv) Limitation on enforcement of security and foreclosure;
          (xxv) Tax risks;
          (xxvi) Absence of independent valuation of the underlying assets;
          (xxvii) General risk associated with emerging markets; and
          (xxviii) Political, economic and social consideration relating to home market;
          (m) Risk factors, which may include:
          (i) Credit risk;
          (ii) Legal risk;
          (iii) Interest rate risk;
          (iv) Operational risk;
          (v) Currency risk;
          (vi) Liquidity risk;
          (vii) Maturity risk;
          (viii) Other risks;
          (n) Disputes, litigations and court orders;
          (o) Subscription terms and conditions, which may include:
          (i) Type and nominal amount of debt securities;
          (ii) Ranking of debt securities;
          (iii) Issue price;
          (iv) Interest/coupon/profit rate/ income;
          (v) Minimum subscription required of the debt securities in order to satisfy the objectives of the issue, offer or invitation (to include procedures for refund if this requirement is not met);
          (vi) Tenor (nature) of the debt securities;
          (vii) Form and denomination of debt securities on issuance;
          (viii) Underwriting arrangements;
          (ix) Events of default;
          (x) Details of any security for the debt securities;
          (xi) Rating assigned to debt securities (together with a description of the rating);
          (xii) Type of listing that is sought;
          (xiii) Summary of rights conferred upon the holders of debt securities;
          (xiv) Governing law — any special legislation under which the debt securities have been created and the choice of jurisdiction in the event of litigation;
          (xv) Repayment terms and frequency of interest/profit/income payments;
          (xvi) Shari'a principle and concept adopted (for Islamic debt securities);
          (xvii) Types of underlying assets of the transaction;
          (xviii) Details of any sinking fund requirement; and
          (xix) Regulatory approvals required including dates of approval;
          (p) Announcements and acknowledgements;
          (q) Additional information, which may include:
          (i) Share capital structure;
          (ii) Memorandum and Articles of Association;
          (r) Applicable law;
          (s) Documents available for inspection; and
          (t) Appendices.
          January 2014

    • OFS-5.4 OFS-5.4 Additional and Specific Content for Convertible Securities

      • OFS-5.4.1

        The issuer of convertible securities must disclose in the offering document the extent to which the shareholder may subscribe for the convertible securities.

        January 2014

      • OFS-5.4.2

        For the purpose of this Section, securities may be converted into other types of securities, or these can be converted into another class of the same securities. The conversion of securities may also take place within the same securities issuer's company and/or group, or in relation to another company or group.

        January 2014

      • OFS-5.4.3

        In the case of convertible securities which are exchangeable for securities of another company, an issuer must submit to the CBB the annual report and accounts of that other company unless that company is listed or adequate information is otherwise available.

        January 2014

      • OFS-5.4.4

        If the debt securities are convertible into equity or are issued with warrants, whether or not detachable, the following detailed information (where applicable) must be made available:

        (a) Mode of conversion;
        (b) Number of warrants;
        (c) Conversion period;
        (d) Price of warrants;
        (e) Conversion ratio;
        (f) Rights attached to warrants;
        (g) Conversion price;
        (h) Warrant exercise period; and
        (i) Warrant exercise price.
        January 2014

    • OFS-5.5 OFS-5.5 Additional and Specific Content for Asset-backed Securities

      • OFS-5.5.1

        With regard to asset-backed securities, the following information must be disclosed in addition to the minimum content requirements set out in section OFS-5.3 and Appendix 4:

        (a) Under a separate section of the offering document, a description of the assets used to back the asset-backed securities, giving at least the following (where relevant):
        (i) The legal jurisdiction(s) to which the assets are subject;
        (ii) The types of assets;
        (iii) The expiry or maturity date(s) of the assets;
        (iv) The amount of the assets;
        (v) Where the assets are secured on or backed by real property or other physical assets, or rely on such security, the ratio of the amount of the assets to the value or amount of such security at origination, if available;
        (vi) For loans and credit agreements, the principal lending criteria and extent to which loans may be included which do not meet these criteria;
        (vii) An indication of significant representations and warranties given to the issuer relating to the assets;
        (viii) The method of origination or creation of the assets;
        (ix) Any rights to substitute the assets and a description of the assets which may be substituted for the original assets;
        (x) For loans and credit agreements, any rights or obligations to make further advances;
        (xi) A description of the principal insurance policies, including the names, and where appropriate, the addresses and a brief description of the providers. Any concentration with one insurer should be disclosed if it is material to the transaction;
        (xii) Where the assets consist of obligations of an obligor's accounts for 10% or more of the assets, so far as the issuer is aware and/or is able to ascertain from information published by the obligor(s), the information required in respect of each obligor will be the same as that which would be required if it were itself the issuer of the securities to be listed;
        (xiii) Where it is already listed on a regulated stock exchange or the obligations are guaranteed by an entity listed on a regulated stock exchange, in this case only the name, address, country of incorporation, nature of business and name of the exchange on which its securities are listed need be disclosed in respect of the obligor and the guarantor (if applicable);
        (xiv) Any relationship between the issuer, guarantor and obligor, if any, must be included. The principal terms and conditions of the obligations must be stated, except where the obligations are debt securities listed on a regulated stock exchange;
        (xv) Where the assets consist of obligations of more than 10 obligors, or where an obligor accounts for less than 10% of the assets the general characteristics and descriptions of the obligors must be given; and
        (xvi) Where the assets consist of equity securities, the information under section OFS-5.2 should be included in respect of those securities.
        (b) Investment considerations:
        (i) An explanation of any matter of significance to investors relating to the issue. Any such explanation should be given appropriate prominence depending on the nature of the matter concerned and its significance to investors; and
        (ii) Where the issuer proposes to or may issue further debt securities backed by the same assets, a prominent statement to that effect and unless those further debt securities are fungible with or are subordinated to any class of existing listed debt security, a statement that the prior approval of the holders of that class will be sought.
        (c) A description of the method and a statement of the date of the sale, transfer or assignment of the assets or of any rights in the assets to the issuer;
        (d) A description of the structure of the transaction;
        (e) An explanation of the flow of funds stating:
        (i) How the cash flow from the assets is expected to meet the issuer's obligations to holders of the securities;
        (ii) Information on any credit enhancements;
        (iii) An indication of where material potential liquidity shortfalls are expected to occur;
        (iv) The availability of any liquidity supports as an indication of provisions to cover interest shortfall risks;
        (v) An indication of any investment parameters for the investment of temporary liquidity surpluses;
        (vi) How payments are collected in respect of the assets;
        (vii) The order of priority of payments made by the issuer to the holders of the class of debt securities in question;
        (viii) Any fees payable by the issuer;
        (ix) Details of any other arrangements upon which payments of interest and principal to investors are dependent;
        (x) Information regarding the accumulation of surpluses in the issuer; and
        (xi) Details of any subordinated debt finance.
        (f) The name, address, description and significant business activities of the originator, or creator of the assets backing the issue;
        (g) The name, address, description and significant business activities of the administrator or equivalent, (if any), together with a summary of the administrator's responsibilities and a summary of the provisions relating to the termination of the appointment of the administrator and the appointment of an alternative administrator;
        (h) The names and addresses and brief description of:
        (i) Any swap counterparties and any providers of other material forms of enhancement; and
        (ii) The banks with which the main accounts relating to the transaction are held.
        (i) If applicable, a statement that the issuer does not intend to publish annual reports and accounts and that the trust deed constituting the issue requires the issuer to provide written confirmation to the trustee (or equivalent), on an annual basis, that no event or default or other matter which is required to be brought to the trustee's attention has occurred.
        January 2014

      • OFS-5.5.2

        If applicable, all information under Paragraph OFS-5.5.1 must be disclosed in the offering document in respect of any underlying assets used to secure the issued securities, whether classified as asset-back securities or otherwise.

        January 2014

    • OFS-5.6 OFS-5.6 Additional and Specific Content for Special Purpose Vehicles (SPV)

      • OFS-5.6.1

        In respect of a Special Purpose Vehicle (SPV) created for the purpose of issuing debt securities, the appointed advisor, or issuer, or other sponsor for the issue, must disclose to the CBB all relevant facts and information relating to the legal, commercial and economic structure associated with the issue.

        January 2014

      • OFS-5.6.2

        The Memorandum and Articles of Association, or copy of such document of the SPV as an issuer, must be submitted to the CBB along with the offering application and must be made available for inspection to the subscriber.

        January 2014

      • OFS-5.6.3

        SPVs are responsible to meet all ongoing obligations related to the securities issued.

        January 2014

      • Additional Issue

        • OFS-5.6.4

          In the case of an issuer wishing to issue more debt securities which are:

          (a) Backed by the same assets;
          (b) Not freely exchangeable with existing classes of debt securities; or
          (c) Not subordinated to existing classes of debt securities;

          then the issuer must inform the debt security holders of the existing classes.

          January 2014

    • OFS-5.7 OFS-5.7 Additional and Specific Content for Islamic Securities

      • OFS-5.7.1

        The application for approval from the CBB for making an offering of Islamic securities must include the following attachments:

        (a) A declaration by the Shari'a advisor that the transaction is in compliance with the principles of Shari'a;
        (b) A declaration by the issuer that the vehicle issuing the securities will remain subject to proper Shari'a review, until the maturity date of the security; and
        (c) A copy of the trust deed or other document securing or constituting the Islamic securities.
        January 2014

      • Appointed Shari'a Advisors

        • OFS-5.7.2

          The offering document must contain the identity of the appointed advisors, including the Shari'a advisor.

          January 2014

      • Shari'a Advisor's Report

        • OFS-5.7.3

          The offering document must contain a Shari'a advisor's report that, at the minimum, covers the compliance of the security and its structure with the Shari'a principles.

          January 2014

    • OFS-5.8 OFS-5.8 Additional and Specific Contents of the Offering Document for Warrants

      • OFS-5.8.1

        The offering document must contain all the information that reasonable investors would require in order to make an informed decision of:

        (a) The capacity of the issuer and guarantor (if any) to fulfil the obligations specified under the terms of the issue; and
        (b) The risks, rights and obligations associated with the warrants.
        January 2014

      • OFS-5.8.2

        The offering documents for warrants must contain, at the minimum, the following information:

        (a) Terms and structure of the issue;
        (b) Financial information on the issuer and its guarantor (if any);
        (c) Financial information on the entity whose securities are the subject of the issue of warrants;
        (d) Whether the issuer has authority to issue further warrants; and
        (e) If the warrants are not fully covered by the underlying securities held by a trustee, a declaration that the issuer has appropriate risk management capabilities to manage the warrants issue.
        January 2014

      • OFS-5.8.3

        In the case of warrants relating to equity or debt securities, the offering document must contain at the minimum:

        (a) The names of the regulated exchange (if any) on which equity securities are already listed or traded;
        (b) The name, registered office and, if different, head office of the issuer;
        (c) The country of incorporation of the issuer; and
        (d) The title of the securities including nominal value.
        January 2014

      • OFS-5.8.4

        Additional information to be contained in the offering document, where warrants offer rights to acquire securities:

        (a) In the case of warrants offering rights to acquire equity securities:
        (i) A statement regarding tax on the income from the shares withheld at source in the country of origin;
        (ii) A statement whether the issuer assumes responsibility for the withholding of tax at source;
        (ii) Arrangements for transfer of the shares and (where permitted) any restrictions on their free transferability (for example, provisions requiring transfers to be approved); and
        (iv) A statement whether the shares are in registered or bearer form.
        (b) In the case of warrants offering rights to acquire debt securities:
        (i) A statement regarding tax on the income from the debt securities withheld at source in the country of origin;
        (ii) A statement whether the issuer assumes responsibility for the withholding of tax at source;
        (iii) A statement whether the debt securities are in registered or bearer form; and
        (iv) Details of any arrangements for transfer of the securities and any restrictions on the free transferability of the debt securities.
        January 2014

      • OFS-5.8.5

        Where any security represents 10 percent or more of the total value of the securities underlying the warrant, a table showing the price range of each such security for each of the last three years must be included.

        January 2014

      • OFS-5.8.6

        In the case of warrants relating to indices, the offering document must contain at the minimum:

        (a) A description of the index, including the name of the publisher of the index, its date of establishment, how it is compiled and a summary of its components;
        (b) An explanation of the computation of the index;
        (c) The frequency with which the index is updated and published; and
        (d) The provisions in the event of modification and discontinuance of the index.
        January 2014

      • OFS-5.8.7

        In the case of warrants relating to other types of securities, assets or variables, the offering document must contain at the minimum:

        (a) A description of the securities, assets or variables;
        (b) A description of the market on which they are traded, including its date of establishment, an indication of daily trading volumes, how price information is published, information as to the standing of the market in its country and the name of the market's regulatory authority; and
        (c) The frequency with which prices of the relevant securities, assets or variables are published.
        January 2014

    • OFS-5.9 OFS-5.9 Additional and Specific Content for Private Placement Memorandum (PPM)

      • OFS-5.9.1

        An offering document for a private placement of securities must meet the requirements of the particular security, as laid out in OFS-5.1, OFS-5.2 and OFS-5.3, and Appendix 2 in regard to preparation. In addition to the above, it must meet the specific requirements for private placement as outlined in this Section.

        January 2014

      • Confirmation as Accredited Investor

        • OFS-5.9.2

          The issuer must obtain a signed confirmation from its investors as to their status as accredited investors using the "Accredited Investors" Form (Appendix 11).

          January 2014

        • OFS-5.9.3

          The issuer must submit a copy of the status confirmation contained in Rule OFS-5.9.2 on submission of the offering document.

          January 2014

      • Suitability of Investors and Risk Statements

        • OFS-5.9.4

          The offering document must contain the following statement in respect of suitability of investors:

          "This offer is a private placement. It is not subject to all of the regulations of the Central Bank of Bahrain that apply to public offerings of securities. This Memorandum is therefore intended only for "Accredited Investors" as defined in the Glossary to this Memorandum.

          The securities offered by way of Private Placement may only be offered in minimum subscriptions of $100,000 (or equivalent in other currencies).

          The Central Bank of Bahrain assumes no responsibility for the accuracy and completeness of the statements and information contained in this document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the contents of this document.

          The Board of Directors and the management of the issuer accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Board of Directors and the management, who have taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the reliability of such information".

          January 2014

        • OFS-5.9.5

          The offering document must contain statements covering the risk of investment to the effect that:

          (a) All prospective investors should make their own investigation into the offer, and consult their own advisors concerning the risks of the investors and the suitability of the securities for their individual requirements; and
          (b) There may be a lack of liquidity and lack of public market for the securities on offer.
          January 2014

        • OFS-5.9.6

          Issuers must ensure that all relevant financial and risk information is placed in the offering document to allow investors to make an informed decision.

          January 2014

      • Utilisation of Proceeds and Disclosure of Fees

        • OFS-5.9.7

          In line with Subparagraph OFS-1.5.2(i), all funds collected through an offering document must only be utilised as prescribed in the offering document, and such condition must be clearly stated in the prospectus under the related section 'Use of Proceeds'. Any usage of funds that is not as stated in the offering document is prohibited without the consent of the securities holders and the approval of the CBB. All applications to the CBB for approval must include evidence of the consent of the securities holders.

          January 2014

        • OFS-5.9.8

          The PPM must disclose the estimated total amount of the proceeds of the issue, and the proposed timetable for their utilisation. Disclosure must also be made of the total amount of fees payable by the investors, up-front discount or placement commission agreed by the underwriters or other placement or selling agents and the issuer of selling shareholders, as well as the percentage such up-front discounts or placement commissions represent of the total amount of the offering, and the amount of up-front discount or placement commission per security.

          January 2014

        • OFS-5.9.9

          The document must highlight to the investor the ultimate dilution of proceeds through the disclosure of fees, offering expenses or up-front discounts or placement commissions. There must be a statement of the major categories of expenses incurred in connection with the issuance and distribution of securities to be offered, and by whom the expenses are payable, if other than by the issuer. If any of the securities are to be offered for the account of an existing holder of securities in the issuer, the PPM must indicate the portion of expenses incurred by him.

          January 2014

        • OFS-5.9.10

          Any private placement of securities offered in the Kingdom of Bahrain should meet the requirements as set out in OFS-2.4.7 and must set fees within reasonable and justifiable levels that do not materially compromise the interests of the issuer or the investor. The above disclosures of fees and utilisation of proceeds must be made prominently and clearly for the attention of investors.

          January 2014

    • OFS-5.10 OFS-5.10 Additional and Specific Content for Guaranteed Issues

      • Guarantees

        • OFS-5.10.1

          With regards to the guaranteed issues, the following information must be disclosed in addition to the minimum content requirement set out in Section OFS-5.3:

          (a) Nature of guarantee, including description of any arrangement intended to ensure that any obligation material to the issue will be duly serviced, whether in the form of a guarantee, surety, keep well agreement, mono-line insurance policy or other equivalent commitment; and
          (b) Scope of guarantee:
          (i) Details regarding the terms and condition and scope of guarantee; and
          (ii) Details of any guarantors power of veto in relation to changes to security holder's rights.
          January 2014

        • OFS-5.10.2

          Where issuing and offering is sought for debt securities of an issuer guaranteed or secured by another legal entity other than its holding company, the guarantor will be required to comply with the requirements of this Section to the same extent as if such guarantor were the issuer of the relevant debt securities.

          January 2014

        • OFS-5.10.3

          An offering document issued in relation to a guaranteed issue must contain the same information regarding the guarantor as that regarding the issuer, so that, where appropriate the "issuer" should be read as applying equally to the guarantor.

          January 2014

        • OFS-5.10.4

          The relevant guarantee must be issued in conformity with the law of the place where the guarantor is incorporated or otherwise established and in conformity with the guarantor's Memorandum and Articles of Association or equivalent documents, and all authorisations needed for its issue under such law or documents must have been duly given.

          January 2014