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  • 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