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  • OFS-7 OFS-7 Distribution and Subscription

    • OFS-7.1 OFS-7.1 Prior Request for Announcement and Invitation for Subscription

      • OFS-7.1.1

        No person may make an announcement for invitation for subscription of an offering of securities, unless he makes sure that the following requirements are met:

        (a) The prospectus or offering document has been duly approved and registered with the CBB;
        (b) All designated advisors have been duly appointed and are ready to undertake their roles and responsibilities;
        (c) All requirements and arrangements related to the offer are in place or it has made sure that such requirements and arrangements will be in place in due course before the announcement of the offer, or commencement of the offering period;
        (d) The availability of a sufficient number of final printed copies of the prospectus or offering document being not later than the date of the commencement of the offering period, and free of charge to potential subscribers on request;
        (e) Confirmation to the CBB that no more changes, amendments or alterations in respect of the information contained in the prospectus or offering document, appointment of the advisors or any information related to the issuer itself, or to the issue will take place after the announcement of the offer or thereafter and a supplementary or replacement prospectus will have to be made as per Paragraph OFS-5.1.11;
        (f) No press releases, press articles and/or interviews or any other form of dissemination of information related to the issue will take place before the subscription invitation announcement in the local daily newspaper; and
        (g) Ensure that all permanent and temporary insiders fully adhere to the insiders' trading rules and confirmation to this extent is submitted to the CBB not later than the commencement of the offering period.
        January 2014

      • Timetable and Record Date

        • OFS-7.1.2

          No person may make an announcement or invitation for subscription of securities, without determining the final record date, which must be a future date after the announcement of the offer but before the commencement of the offering period:

          (a) In relation to a public offer, the CBB must be notified at least 10 days before the intended record date;
          (b) The offering document and public announcement must disclose the record date; and
          (c) Once announced, the issuer must not make any subsequent alterations to the record date.
          Amended: April 2014
          January 2014

      • Offer Period

        • OFS-7.1.3

          Unless otherwise determined in law or agreed by the CBB, the offer period for subscription of securities must be open for subscription as follows:

          (a) For equity securities, the offer period cannot be less than 10 calendar days after the day of commencement of the offer and must not exceed a maximum period of 6 months;
          (b) For a secondary listing involving an offer of shares or in the case of a rights issue, 5 days from the issue of an announcement stipulating the issue is fully subscribed;
          (c) For other securities the offer period must not be less than 15 calendar days after the day of commencement of the offer. Additionally, it must not exceed a maximum period of 6 months from the date of opening unless extended by the CBB in writing;
          (d) For any offering of securities, the offering period must not extend beyond the validity of the date of the prospectus or offering document, which is a period of 6 months; and
          (e) Must not allow for the closing of the offering period to be less than 1 month from the publication of annual audited financial statements, or interim unaudited but reviewed financial statements.
          Amended: April 2014
          January 2014

      • Offer Price

        • OFS-7.1.4

          An issuer, when stating an offer price must also make reference to and provide a description in the prospectus or offering document of the bookbuilding, underwriting, price stabilisation or other relevant price factors.

          January 2014

        • OFS-7.1.5

          Where an issuer is making a public offer following a rights share offering or a private offer, it may price the offers differently for the public offer or private placement. In such cases, the differential pricing must also consider the market trends and the justification for the price difference must be outlined in the offering document. The CBB will determine whether the differential pricing is in the best interests of the investors and the market in general.

          January 2014

      • Listings

        • OFS-7.1.6

          Where the securities are to be listed on a licensed exchange, this must be disclosed in the offer and must provide the following information:

          (a) Location and name of the exchange;
          (b) Listing agent, if any;
          (c) Planned listing timeline;
          (d) The percentage of the total issued and outstanding securities to be made available for public subscription and trading on a licensed exchange;
          (e) Any market making or price stabilisation arrangements;
          (f) Any anticipated buy back agreement or related intention of the issuer;
          (g) Any lock up period of major or other class of securities holders;
          (h) The necessary clearing, settlement, central depository and securities transfer ownership arrangements; and
          (i) Any intention or agreement for a secondary (cross) listing.
          January 2014

        • OFS-7.1.7

          Where the offering document states that the offer will be listed on issue, the CBB may prevent allotment from taking place where the issuer has not obtained the authority to list from the licensed exchange at the time of issue, and order that the issuer refund any monies paid by subscribers in respect of such issue.

          January 2014

        • OFS-7.1.8

          The issuer, lead manager and/or any other appointed advisor must ensure that the requisite listing agreement is signed within a maximum of 10 calendar days from the closing date of the offering period, and that the date for commencement of trading on a licensed exchange is within a maximum of 15 calendar days from the closing date of the offering period. Immediately upon the signing of the listing agreement with the licensed exchange, the lead manager must notify the CBB confirming the signing of the listing agreement and inform the CBB of the date for the commencement of trading.

          Added: October 2017

        • OFS-7.1.9

          As the listing authority under Article 86 of the CBB Law, the CBB shall retain the right to determine and decide on the final date of listing and/or date of commencement of trading of securities on a licensed exchange.

          Added: October 2017

    • OFS-7.2 OFS-7.2 Announcement

      • OFS-7.2.1

        No person may make a public offer of securities unless a summary of the offering document has been published in two local daily newspapers, one in Arabic and one in English.

        January 2014

      • OFS-7.2.2

        The summary of the offering document must be published in at least a 52 cm x 31.5 cm format. For those papers whose pages are smaller than the prescribed size noted in this Paragraph, the publication must take place over 2 pages or more to meet the total size specified and must be clear and legible.

        January 2014

      • OFS-7.2.3

        The offering document must be made available to the public at least 5 calendar days prior to the commencement of the offering period and at the same time as publishing the summary of the offering document.

        January 2014

      • OFS-7.2.4

        The offering document available to the public must be identical to the printed proof version approved by the CBB.

        January 2014

      • OFS-7.2.5

        The offering document is available to the public when:

        (a) An announcement is made in accordance with Rule OFS-7.2.1;
        (b) It is publicly available in final printed form free of charge at the registered office of the issuer, lead manager and receiving bank for public offering and, if applicable, at the offices of the principal advisor or other designated advisor placing or selling the securities; and
        (c) If available in electronic form, it is available on the issuer's, lead manager's or other principal advisor's website.
        January 2014

      • OFS-7.2.6

        Announcements for a public offering must:

        (a) Contain a prominent statement to the effect that the advertisement is not an offering document and investors should not subscribe for any securities, except on the basis of information in the offering document;
        (b) Indicate the date of approval by the CBB of the offering document;
        (c) Indicate how the offering document may be obtained, including particulars of the internet website where a soft copy of the document can be found if available;
        (d) Include clear risk warnings, including the potential for loss that is to be prominently presented and not obscured or disguised; and
        (e) Be consistent with the information contained in the offering document.
        January 2014

      • OFS-7.2.7

        An issuer and its affiliated employees and professional advisors are prohibited from stating or disseminating any statements during the offering period that may lead to:

        (a) Encouragement of subscription for the securities;
        (b) Inducement of a particular person to deal in the securities;
        (c) Sale or purchase of the securities; or
        (c) Raising, lowering, maintaining or stabilising the market price of the securities in conjunction with dissemination or statement of misleading information.
        January 2014

      • OFS-7.2.8

        No announcement, advertisement or promotion of an offer of securities that would constitute or induce a person to subscribe for such securities may be made without meeting the requirements of Paragraph OFS-5.1.28.

        January 2014

    • OFS-7.3 OFS-7.3 Stop Order for Offering Document

      • OFS-7.3.1

        The following is a non-exclusive list of examples under which the CBB may issue an order under this Section:

        (a) If there exists any statement or matter which, in the opinion of the CBB, is false or misleading;
        (b) Omission of information that should have been included in the offering documents in accordance with this Module;
        (c) There is a change in circumstances of the issuer or conditions;
        (d) If the offering period is fixed or extended to be close to the date of the next declaration of the issuer's financial statements for a period not less than 30 calendar days;
        (e) Receipt of any serious complaint from the subscribers, particularly relating to the availability of the final printed offering document, or the imposition of additional cost or charges which have not been stipulated in the offering document;
        (f) The raising of new litigation or a court order related to the issuer and/or to the offering itself in or outside Bahrain; or
        (g) The withdrawal of any declaration or consent that has been given by any appointed advisor.
        January 2014

      • OFS-7.3.2

        The CBB may, by an order in writing, prevent any further use of a prospectus or offering document or issue, sale or allotment of securities connected to an offer where the issuer or any person acting on its behalf has committed a violation of the CBB Law, CBB rules or this Module. The CBB may in addition, issue such order where it believes such action is in the best interest of investors or the capital market in general.

        January 2014

    • OFS-7.4 OFS-7.4 Subscription Results and Allotment

      • Announcement of Subscription

        • OFS-7.4.1

          Subscription monies received in respect of a public offer must be held in a separate bank account with an approved receiving bank, until the final allotment of such securities has been approved by the CBB.

          January 2014

        • OFS-7.4.2

          The issuer, lead manager or other principal advisor must publish the results of the subscription of a public offer in at least two local newspapers, one in Arabic and the other in English, stating all facts related to the outcome of the subscription in at least a 26 cm x 31.5 cm format. The announcement must be published within a maximum period of two calendar days from the closing date of the offering period and must include the final allotment basis. The declared allotment basis must not be subject to any change thereafter.

          Amended: October 2017
          January 2014

        • OFS-7.4.3

          The issuer must allot or allocate securities within 6 calendar days of the closing date of the offer in accordance with the allotment basis stipulated in the offering document or otherwise approved by the CBB upon the subscription results and publication referred to in Paragraph OFS-7.4.2.

          Amended: October 2017
          January 2014

      • Under-subscription

        • OFS-7.4.4

          The offering document must provide full information about the possibility of an under-subscription event, particularly regarding the treatment of unsubscribed shares for those issues which are not fully underwritten.

          January 2014

        • OFS-7.4.5

          In the event that the issue is not underwritten no allotment may be made of any securities unless the subscription received is, at least equal to the minimum subscription amount set out in the offering document.

          January 2014

        • OFS-7.4.6

          If a public offering of equity securities has not been fully subscribed and the offer is underwritten, the underwriter must purchase the unsubscribed shares and after obtaining the CBB approval, may then re-offer or resell the unsubscribed shares. For the avoidance of doubt, any unsubscribed shares that might be re-offered or re-sold to a related company of the underwriter such as the company that controls it, its subsidiary, a subsidiary of the company that controls it and a company affiliated with it, shall be subject to the same underwriting commitment of the underwriter.

          Amended: October 2017
          January 2014

        • OFS-7.4.7

          If a rights offering of equity securities which is underwritten has not been fully subscribed during the offering period, the underwriter may either re-offer the unsubscribed shares to the public or purchase the unsubcribed shares.

          January 2014

        • OFS-7.4.8

          If a public offering of debt securities or other which is underwritten has not been fully subscribed for during the offering period, the underwriters must purchase the unsubscribed securities and after obtaining the CBB approval, may then resell these securities.

          January 2014

      • Over-subscription

        • OFS-7.4.9

          If an offer of securities is over-subscribed after the closing of the offering period, the issuer must allot the shares in accordance with the pre-determined basis of allotment which must be described in the offering document or otherwise approved by the CBB.

          January 2014

        • OFS-7.4.10

          Issuers and lead managers must make sure conditions relating to allotment basis and minimum subscription amounts are in compliance with the Memorandum and Articles of Association, or equivalent constitutional documents of the issuer, as well as in accordance with the applicable laws, rules and regulations.

          January 2014

      • General Guidance on the Allotment

        • OFS-7.4.11

          The basis of allotment of any securities offered, must be clearly stated in the offering document.

          January 2014

        • OFS-7.4.12

          While exercising the allotment of securities the issuer, lead manager, or any appointed advisor must ensure that:

          (a) For any new public offering of equity securities, no subscriber is allotted more than 10% of the total shares offered;
          (b) All subscribers are treated equally and in accordance with the allotment basis in all aspects, particularly when the rounding up rule is applied;
          (c) No payment, direct or indirect in the nature of a discount, commission and allowance or otherwise may be made either by the issuer or the promoters in any public offer to the parties who received firm allotment;
          (d) No shareholder of the issuer may receive, directly or indirectly, any consideration in the nature of fees, commission, allowance or other benefit, whether in cash or in kind, in a public offering;
          (e) The total securities allotted must in any case not exceed the total securities offered and approved by the General Assembly and the issuer, lead manager and any other appointed advisor must establish the allotment basis to avoid such possibility;
          (f) Allotment of securities must avoid allocation of any securities fraction, and therefore the issuer must provide provisions related to the possibility of fractions of securities remaining after final allotment; and
          (g) For any rights issue, the pro-rata allotment basis must be applied, or otherwise the General Assembly of securities holders must have approved such other allotment basis.
          January 2014

      • Over-allotments

        • OFS-7.4.13

          The "over-allotment option" may only be exercised if such an option is disclosed and provided for in the offering document.

          January 2014

        • OFS-7.4.14

          While exercising the over-allotment option, the issuer, lead manager or any other appointed advisor must fully adhere to general guidelines under Paragraph OFS-7.4.12.

          January 2014

        • OFS-7.4.15

          The CBB may allow the extension of the allotment period up to 6 calendar days to exercise the over-allotment option upon the request of the issuer, lead manager or any other appointed advisor on application, which contains the reasons and justifications for such extension.

          Amended: October 2017
          January 2014

        • OFS-7.4.16

          In the event of the over-allotment option, the issuer, lead manager or any other appointed advisor is not allowed to exercise any discrimination, whether in cash or in kind among the subscribers or allottees.

          January 2014

        • Trading of Underwritten Securities Subscribed by the Underwriter

          • OFS-7.4.17

            Where the underwriter has subscribed for, or purchased securities under an underwriting or sub-underwriting agreement following the under-subscription of the offering of securities, any intention to sell those securities in the ordinary course of trading on a licensed exchange shall, in the interest of maintaining market integrity, not be sold against any price stabilisation fund or the designated market maker as the buying counterparty.

            Added: October 2017

    • OFS-7.5 OFS-7.5 Refunding and Dispatching

      • OFS-7.5.1

        The issuer, lead manager or any other appointed advisor must refund the excess subscription money and dispatch securities within a maximum of 9 calendar days from the closing date of the offering period.

        Amended: January 2018
        Amended: October 2017
        January 2014

      • OFS-7.5.2

        A record for such refunding and dispatching must be maintained for further reference and CBB inspection requirements.

        January 2014

      • OFS-7.5.3

        If the issuer fails to meet the refunding and dispatching date under Rule OFS-7.5.1, an interest at one month BIBOR is payable to the subscriber with respect to the subscription amounts received for the period from the required refunding and dispatching date to the actual refunding or dispatching date.

        January 2014

      • Dematerialised Securities

        • OFS-7.5.4

          As per Paragraph OFS-1.5.5, securities issued to the public after the effective date of this Module must have an allocated ISIN and be in dematerialised form and the issuer is required to designate the clearing house, or depository facility in which such securities will be deposited.

          January 2014

        • OFS-7.5.5

          For the purposes of Article 178 of the CBB Law and Volume 6, dematerialised securities shall mean securities issued and entered in the registry in an electronic format and dematerialisation means the conversion of a security certificate from a physical form to an electronic form for securities that have already been issued before the effective date of this Module.

          January 2014

        • OFS-7.5.6

          For the purposes of dematerialisation, each subscriber or shareholder will have to open an account with a licensed clearing house or a licensed central depository, acceptable to the CBB, and then request for dematerialisation of his certificates through the depository.

          January 2014

        • OFS-7.5.7

          The dispatching of the dematerialised securities must be done in accordance with the CSD Module and SROs business rules.

          January 2014

        • OFS-7.5.8

          The ownership and entitlement of allotted securities for each subscriber or allottee is established by book entry in the register maintained by the licensed clearing house and or licensed central depository, rather than through the issuing of a physical share certificate.

          January 2014

      • Physical Securities

        • OFS-7.5.9

          Subject to the requirements of the CSD Module, unless the security is required to be in dematerialised form, the subscriber may request a certificate as evidence of his shareholding, which certificate must contain or be in the following form:

          (a) The serial number;
          (b) The par value and class of the security;
          (c) The name of the issuer and the authority under which it was incorporated;
          (d) The address of the registered office of the issuer;
          (e) The name and address of the clearing house, central depository institution, and/or securities ownership transfer agent, if it is different from the registered office of the issuer;
          (f) Where a rubber seal is imprinted, original signatures must support it;
          (g) Where an embossed seal is used, it may, subject to the Articles of Association of the issuer, be supported by facsimile signatures only;
          (h) Where only the seal is used without supporting signatures, the method or system of control by the issuer on the application of the seal must be approved by the auditor of the issuer, and a copy of such approval forwarded to the CBB;
          (i) The certificate security must be designed so that the paper quality and watermark forgery and/or alterations are easily detectable;
          (j) The printing of securities certificates must only be entrusted to recognised securities printers; and
          (k) The size of the certificate is prescribed by the clearing house and/or central depository, which is used by the issuers.
          January 2014

        • OFS-7.5.10

          [This Paragraph was deleted in October 2017]

          Deleted: October 2017
          January 2014