• CRA-1 CRA-1 Licensing

    • CRA-1.1 CRA-1.1 License for crypto-asset service

      • CRA-1.1.1

        No person may market or undertake the activities, by way of business, within or from the Kingdom of Bahrain, comprised of regulated crypto-asset services without obtaining a license from the CBB.

        Added: April 2019

      • CRA-1.1.2

        For the purposes of Paragraph 1.1.1, undertake the activities, by way of business means:

        (a) Providing one or more of services specified in Paragraph CRA-1.1.6 for commercial gain;
        (b) Holding oneself out as willing and able to provide the services specified in Paragraph CRA-1.1.6; or
        (c) Regularly soliciting other persons to engage in providing the services specified in Paragraph CRA-1.1.6.
        Added: April 2019

      • CRA-1.1.3

        A person would be considered in breach of CRA-1.12 if the person attempts to operate as, or incorporate a company in Bahrain with a name containing the words (or the equivalents in any language) "crypto", "digital", "currency", or "asset" in combination with "exchange", "manager", "adviser", "investment", or "portfolio", without holding the appropriate CBB license or the prior approval of the CBB.

        Added: April 2019

      • CRA-1.1.4

        For the purpose of this Module, any promotion, offering, announcement, advertising, broadcast or any other means of communication made for the purpose of inducing recipients to purchase, exchange, or otherwise acquire financial services in return for monetary payment or some other form of valuable consideration shall be considered "marketing" in accordance with Resolution No. (16) for the year 2012.

        Added: April 2019

      • CRA-1.1.5

        The activities will be deemed to be undertaken 'within or from the Kingdom of Bahrain', if, for example, the person concerned:

        (a) Is incorporated in the Kingdom of Bahrain;
        (b) Uses an address situated in the Kingdom of Bahrain for its correspondence; or
        (c) Directly solicits clients within the Kingdom of Bahrain.
        Added: April 2019

      • Regulated Crypto-Asset Services

        • CRA-1.1.6

          Regulated crypto-asset services means the conduct of any or any combination of the following types of activities:

          (a) Reception and Transmission of order: The reception from a client of an order to buy and/or sell one or more accepted crypto-assets and the transmission of that order to a third party for execution.
          (b) Execution of orders on behalf of clients: Acting to conclude agreements to buy and/or sell for one or more accepted crypto-assets on behalf of the clients.
          (c) Dealing on own account: Trading against proprietary capital resulting in conclusion of transactions in one or more accepted crypto-assets.
          (d) Portfolio Management: Managing or agreeing to manage accepted crypto-assets belonging to a client and the arrangement for their management are such that the licensee managing or agreeing to manage those accepted crypto-assets has a discretion to invest in one or more accepted crypto-assets.
          (e) Crypto-asset Custodian: safeguarding, storing, holding, maintaining custody of or arranging on behalf of clients for accepted crypto-assets. Investment Advice: Giving, offering or agreeing to give, to persons in their capacity as investors or potential investors or as agent for an investors or potential investor, a personal recommendation in respect of one or more transactions relating to one or more accepted crypto-assets.
          (f) Investment Advice: Giving, offering or agreeing to give, to persons in their capacity as investors or potential investors or as agent for an investors or potential investor, a personal recommendation in respect of one or more transactions relating to one or more accepted crypto-assets. A "personal recommendation" means a recommendation presented as suitable for the client to whom it is addressed, or which is based on a consideration of the circumstances of that person, and must constitute a recommendation to buy, sell, exchange, exercise or not to exercise any right conferred by a particular accepted crypto-asset, or hold a particular accepted crypto-asset. A recommendation is not a "personal recommendation" if it is issued exclusively through distribution channel or to the public.
          (g) [This subparagraph was moved to CRA-1.1.6(f) in April 2019].
          Added: April 2019

      • Exclusions

        • CRA-1.1.7

          The following activities do not constitute regulated crypto-asset services:

          (a) the creation or administration of crypto assets;
          (b) the development, dissemination or use of software for the purpose of creating or mining a crypto asset; or
          (c) a loyalty programme.
          Added: April 2019

        • CRA-1.1.8

          Depending on the type of regulated crypto-asset services that a person wishes to undertake, applicants may seek to be licensed by the CBB under one of the following 4 categories of license:

          Added: April 2019

      • Category 1

        • CRA-1.1.9

          Category 1 licensees may undertake one or more regulated crypto-asset service, as listed below:

          (i) Reception and transmission of orders;
          (ii) Provide investment advice in relation to accepted crypto-assets.
          Added: April 2019

        • CRA-1.1.10

          When undertaking the regulated crypto-asset services listed under Rule CRA-1.1.9, Category 1 licensees:

          (a) Must not hold any client assets or client money;
          (b) Must refrain from receiving any fees or commissions from any party other than the client; and
          (c) Must not operate a crypto-asset exchange.
          Added: April 2019

      • Category 2

        • CRA-1.1.11

          Category 2 licensees may undertake one or more regulated crypto-asset services, as listed below:

          (i) Trading in accepted crypto-assets as agent;
          (ii) Portfolio Management;
          (iii) Crypto-asset custody;
          (iv) Investment advice.
          Added: April 2019

        • CRA-1.1.12

          When undertaking the regulated crypto-asset services listed under Rule CRA-1.1.11, Category 2 licensees may hold or control client asset and client money but must not deal from their own account ("dealing as principal") or operate a crypto-asset exchange.

          Added: April 2019

      • Category 3

        • CRA-1.1.13

          Category 3 licensees may undertake one or more regulated crypto-asset services, as listed below:

          (i) Trading in accepted crypto-assets as agent;
          (ii) Trading in accepted crypto-assets as principal;
          (iii) Portfolio Management;
          (iv) Crypto-asset custody;
          (v) Investment advice.
          Added: April 2019

        • CRA-1.1.14

          When undertaking regulated crypto-asset services listed under Rule CRA-1.1.13, Category-3 licensees may hold or control client assets and client money, may deal on their own account ("dealing as principal") but must not operate a crypto-asset exchange.

          Added: April 2019

      • Category 4

        • CRA-1.1.15

          Category 4 licensees may undertake one or more regulated crypto-asset service, as listed below:

          (i) Operate a licensed crypto-asset exchange;
          (ii) Crypto-asset custody service.
          Added: April 2019

        • CRA-1.1.16

          Licensees offering crypto-asset exchange service (licensed crypto-asset exchange) must not execute client orders against proprietary capital, or engage in matched principal trading.

          Added: April 2019

        • CRA-1.1.17

          When undertaking the regulated crypto-asset services listed under Rule CRA-1.1.15, Category-4 licensees may hold or control client asset and client money.

          Added: April 2019

        • CRA-1.1.18

          Persons wishing to be licensed to undertake the activities of regulated crypto-asset services must apply in writing to the CBB.

          Added: April 2019

        • CRA-1.1.19

          An application for a license must be in the form prescribed by the CBB and must contain, inter alia:

          (a) A business plan specifying the type of business to be conducted;
          (b) Application forms for all shareholders and subsidiaries; and
          (c) Application forms for all controlled functions.
          Added: April 2019

        • CRA-1.1.20

          The CBB will review the application and duly advise the applicant in writing when it has:

          (a) Granted the application without conditions;
          (b) Granted the application subject to conditions specified by the CBB; or
          (c) Refused the application, stating the grounds on which the application has been refused and the process for appealing against that decision.
          Added: April 2019

        • CRA-1.1.21

          Detailed Rules and guidance regarding information requirements and processes for licenses can be found in Section CRA-1.2. As specified in Paragraph CRA-1.2.13, the CBB will provide a formal decision on a license application within 60 calendar days of all required documentation having been submitted in a form acceptable to the CBB.

          Added: April 2019

        • CRA-1.1.22

          Applicants seeking a regulated crypto-asset service license must satisfy the CBB that they meet, by the date of grant of license, the minimum criteria for licensing, as contained in Chapter CRA-2. Once licensed, the regulated crypto-asset service licensee must continue to meet these criteria on an on-going basis.

          Added: April 2019

      • Combining Regulated Crypto-asset Services

        • CRA-1.1.23

          Licensees may combine two or more regulated crypto-asset services, provided these fall within the permitted list of services and such combinations does not create possible conflict of interest.

          Added: April 2019

        • CRA-1.1.24

          Those seeking a license should satisfy the CBB as to their suitability to carry out the regulated crypto-asset services for which they are seeking license.

          Added: April 2019

        • CRA-1.1.25

          In assessing applications for a license, the CBB will assess whether an applicant satisfies the licensing conditions (as specified in Chapter CRA-2) with respect to all the regulated services that the applicant proposes to undertake.

          Added: April 2019

    • CRA-1.2 CRA-1.2 Application for License

      • CRA-1.2.1

        Applicants for a license must submit a duly completed Form 1 (Application for a License), under cover of a letter signed by an authorised signatory of the applicant marked for the attention of the Director, Licensing Directorate. The application must be accompanied by the documents listed in Rule CRA-1.2.4, unless otherwise directed by the CBB.

        Added: April 2019

      • CRA-1.2.2

        Articles 44 to 47 of the CBB Law govern the licensing process which also stipulates that the CBB will take a decision within 60 calendar days of an application being deemed complete (i.e. containing all required information and documents). See below, for further details on the licensing process and time-lines

        Added: April 2019

      • CRA-1.2.3

        References to applicant mean the proposed licensee seeking a license. An applicant may appoint a representative — such as a law firm or professional consultancy — to prepare and submit the application. However, the applicant retains full responsibility for the accuracy and completeness of the application, and is required to certify the application form accordingly. The CBB also expects to be able to liaise directly with the applicant during the licensing process, when seeking clarification of any issues.

        Added: April 2019

      • CRA-1.2.4

        Unless otherwise directed by the CBB, the following documents must be provided in support of the application for license:

        (a) A duly completed Form 2 (Application for Authorisation of Shareholders) for each Shareholder of the proposed licensee;
        (b) A duly completed Form 3 (Application for Approved Person status), for each individual proposed to undertake a controlled function (as defined in Rule CRA-1.7.2) in the proposed licensee;
        (c) A comprehensive business plan for the application, addressing the matters described in Rule CRA-1.2.6;
        (d) For overseas companies, a copy of the company's current commercial registration, license from competent authority and/or equivalent documentation;
        (e) Where the applicant is an existing Bahraini company, a copy of the applicant's commercial registration certificate;
        (f) A certified copy of a Board resolution of the applicant, confirming its decision to seek a CBB crypto-asset service license;
        (g) In the case of applicants that are part of a group, a letter of non-objection to the proposed license application from the applicant's lead supervisor, together with confirmation that the group is in good regulatory standing and is in compliance with applicable supervisory requirements, including those relating to capital requirements;
        (h) In the case of branch applicants, a letter of non-objection to the proposed license application from the applicant's home supervisor, together with confirmation that the applicant is in good regulatory standing and the company concerned is in compliance with applicable supervisory requirements, including those relating to capital;
        (i) In the case of branch applicants, copies of the audited financial statements of the applicant (head office) for the three years immediately prior to the date of application;
        (j) In the case of applicants that are part of a group, copies of the audited financial statements of the applicant's group, for the three years immediately prior to the date of application;
        (k) In the case of applicants not falling under either (i) or (j) above, copies of the audited financial statements of the applicant's substantial shareholder (where they are a legal person), for the three years immediately prior to the date of application;
        (l) A copy of the applicant's memorandum and articles of association (in draft form for applicants creating a new company); and
        (m) Details of all banking arrangements.
        Added: April 2019

      • CRA-1.2.5

        The CBB, in its complete discretion may ask for a letter of guarantee from the applicant's controlling or major shareholders on a case by case basis as it deems appropriate/necessary as part of the required documents to be submitted as mentioned in Paragraph CRA-1.2.4 above.

        Added: April 2019

      • CRA-1.2.6

        The business plan submitted in support of an application must include:

        (a) An outline of the history of the applicant and its shareholders;
        (b) A description of the proposed, current, and historical business of the applicant, including detail on the products and services provided and to be provided, all associated websites addresses, the jurisdictions in which the applicant is engaged in business, the principal place of business, the primary market of operation and the projected customer base;
        (c) The reasons for applying for a license, including the applicant's strategy and market objectives;
        (d) The proposed Board and senior management of the applicant and the proposed organisational structure of the applicant;
        (e) An independent assessment of the risks that may be faced by the applicant, together with the proposed systems and controls framework to be put in place for addressing those risks and to be used for the main business functions; and
        (f) An opening balance sheet for the applicant, together with a three-year financial projection, with all assumptions clearly outlined, demonstrating that the applicant will be able to meet applicable capital adequacy requirements.
        Added: April 2019

      • CRA-1.2.7

        The applicant's memorandum and articles of association must explicitly provide for it to undertake the activities proposed in the license application, and must preclude the applicant from undertaking other regulated services, or commercial activities, unless these arise out of its regulated crypto-asset services or are incidental to those.

        Added: April 2019

      • CRA-1.2.8

        All documentation provided to the CBB as part of an application for a license must be in either the Arabic or English languages. Any documentation in a language other than English or Arabic must be accompanied by a certified English or Arabic translation thereof.

        Added: April 2019

      • CRA-1.2.9

        Any material changes or proposed changes to the information provided to the CBB in support of an licensing application that occurs prior to licensing must be reported to the CBB.

        Added: April 2019

      • CRA-1.2.10

        Failure to inform the CBB of the changes specified in Rule CRA-1.2.9 is likely to be viewed as a failure to provide full and transparent disclosure of information, and thus a failure to meet licensing condition stipulated in Paragraph CRA-2.8.2.

        Added: April 2019

      • Licensing Process and Timelines

        • CRA-1.2.11

          By law, the 60 days' time limit referred to in Paragraph CRA-1.2.2 only applies once the application is complete and all required information (which may include any clarifications requested by the CBB) and documents have been provided. This means that all the items specified in Rule CRA-1.2.4 have to be provided, before the CBB may issue a license.

          Added: April 2019

        • CRA-1.2.12

          The CBB recognises, however, that applicants may find it difficult to secure suitable senior management (refer CRA-1.2.4(b) above) in the absence of preliminary assurances regarding the likelihood of obtaining a license.

          Added: April 2019

        • CRA-1.2.13

          Therefore, applicants may first submit an unsigned Form 1 in draft, together with as many as possible of the items specified in Rule CRA-1.2.4. This draft application should contain at least items in Rule CRA-1.2.4(a); Rule CRA-1.2.4(b), with respect to proposed Directors (but not necessarily senior management); Rule CRA-1.2.4(c); Rule-CRA-1.2.4(d); and Rule CRA-1.2.4(g) to Rule CRA-1.2.4(m) inclusive.

          Added: April 2019

        • CRA-1.2.14

          On the basis of the information specified in Paragraph CRA-1.2.13, the CBB may provide an initial 'in principle' confirmation that the applicant appears likely to meet the CBB's licensing requirements, subject to the remaining information and documents being assessed as satisfactory. The 'in principle' confirmation will also list all outstanding documents required before an application can be considered complete and subject to formal consideration.

          Added: April 2019

        • CRA-1.2.15

          An 'in principle' confirmation does not constitute a license approval, nor does it commit the CBB to issuing a license. However, it provides sufficient assurance for an applicant to complete certain practical steps, such as securing suitable executive staff that satisfy CBB's 'fit and proper' requirements. Once this has been done, the applicant may finalise its application, by submitting the remaining documents required under Rule CRA-1.2.1 and, once assessed as complete by the CBB, a signed and dated final version of Form 1. However, a Bahraini company proposing to undertake financial services activities would not be eligible to obtain a Commercial Registration from the Ministry of Commerce, Industry and Tourism unless it receives the final approval from the CBB.

          Added: April 2019

        • CRA-1.2.16

          Regardless of whether an applicant submits a draft application or not, all potential applicants are strongly encouraged to contact the CBB at an early stage to discuss their plans, for guidance on the CBB's license categories and associated requirements. The Licensing Directorate would normally expect to hold at least one pre-application meeting with an applicant, prior to receiving an application (either in draft or in final).

          Added: April 2019

        • CRA-1.2.17

          Potential applicants should initiate pre-application meetings in writing, setting out a short summary of their proposed business and any issues or questions that they may have already identified, once they have a clear business proposition in mind and have undertaken their preliminary research. The CBB can then guide the applicant on the specific areas in the Rulebook that will apply to them and the relevant requirements that they must address in their application.

          Added: April 2019

        • CRA-1.2.18

          An applicant must not hold himself out as having been licensed by the CBB, prior to receiving formal written notification of the fact in accordance with Rule CRA-1.2.19 below. Failure to do so may constitute grounds for refusing an application and result in a contravention of Articles 40 and 41 of the CBB Law (which carries a maximum penalty of BD 1 million).

          Added: April 2019

      • Granting or Refusal of License

        • CRA-1.2.19

          To be granted a license, an applicant should demonstrate compliance with the applicable requirements of the CBB Law, this Module as well as other applicable modules of Volume 6. Should a license be granted, the CBB will notify the applicant in writing of the fact; the CBB will also publish its decision to grant a license in the Official Gazette and in two local newspapers (one published in Arabic, the other in English). The license may be subject to such terms and conditions as the CBB deems necessary for the additional conditions being met.

          Amended: October 2019
          Added: April 2019

        • CRA-1.2.20

          The CBB may refuse to grant a license if in its opinion:

          (a) The requirements of the CBB Law or this Module are not met;
          (b) False or misleading information has been provided to the CBB, or information which should have been provided to the CBB has not been so provided; or
          (c) The CBB believes it necessary in order to safeguard the interests of potential clients.
          Amended: October 2019
          Added: April 2019

        • CRA-1.2.21

          Where the CBB intends to refuse an application for a license, it will give the applicant a written notice to that effect. Applicants will be given a minimum of 30 calendar days from the date of the written notice to appeal the decision, as per the appeal procedures specified in the notice.

          Amended: October 2019
          Added: April 2019

        • CRA-1.2.22

          Before the final approval is granted to a licensee, a confirmation from a retail bank addressed to the CBB that the minimum capital, as specified in this Module, has been paid in must be provided to the CBB.

          Added: April 2019

      • Readiness Assessment

        • CRA-1.2.23

          Prior to commencement of operation, a licensee must, after obtaining the CBB's prior written approval, appoint an independent third party to undertake a readiness assessment and submit a readiness assessment report.

          Added: April 2019

        • CRA-1.2.24

          The readiness assessment report must include the licensee's risk management system, capital adequacy, organisational structure, operational manuals, information technology, information system security, policies and procedures and internal controls and systems.

          Added: April 2019

        • CRA-2.2.25

          The CBB may conduct an examination or seek further information to ascertain the readiness of the licensee to commence operation, even if a readiness assessment report has been submitted to the CBB.

          Added: April 2019

      • Commencement of Operations

        • CRA-2.2.26

          Within 6 months of the license being issued, the new licensee must provide to the CBB (if not previously submitted):

          (a) The registered office address and details of premises to be used to carry out the business of the proposed licensee;
          (b) The address in Bahrain where full business records will be kept;
          (c) The licensee's contact details including telephone and fax number, e-mail address and website;
          (d) A copy of its business continuity plan;
          (e) A description of the IT system that will be used, including details of how IT systems and other records will be backed up;
          (f) A copy of the auditor's acceptance to act as auditor for the applicant;
          (g) A copy of an auditor's opinion certifying that the licensee's capital — as specified in the business plan submitted under Rule CRA-1.2.4 has been paid in;
          (h) A copy of the licensee's professional indemnity insurance policy;
          (i) A copy of the applicant's notarized memorandum and articles of association, addressing the matters described in Paragraph CRA-1.2.9;
          (j) A copy of the commercial registration certificate in Arabic and in English from the Ministry of Commerce, Industry and Tourism;
          (k) A copy of the licensee's business card and any written communication (including stationery, website, e-mail, business documentation, etc.) including a statement that the company is licensed by the CBB; and
          (l) Any other information as may be specified by the CBB.
          Added: April 2019

        • CRA-2.2.27

          Upon receipt of a license from the CBB, the licensee must commence their commercial operations within 6 months of being granted a license by the CBB, failing which the CBB may cancel the license, as per the powers and procedures set out in Article 48 of the CBB Law.

          Added: April 2019

        • CRA-1.2.28

          The procedures for amending or cancelling licenses are contained in Sections CRA-1.3.

          Added: April 2019

    • CRA-1.3 CRA-1.3 Cancellation of License

      • Voluntary Surrender of a License

        • CRA-1.3.1

          In accordance with Article 50 of the CBB Law, licensees wishing to cancel their license, must obtain the CBB's written approval, before ceasing their activities. All such requests must be made in writing to the Director, Capital Markets Supervision, setting out in full the reasons for the request and how the business is to be wound up.

          Added: April 2019

        • CRA-1.3.2

          Licensees must satisfy the CBB that their clients' interests are to be safeguarded during and after the proposed cancellation.

          Added: April 2019

        • CRA-1.3.3

          Failure to comply with Rule CRA-1.3.1 may constitute a breach of Article 50(a) of the CBB Law. The CBB will only approve such a request where it has no outstanding regulatory concerns and any relevant client interests would not be prejudiced. A voluntary surrender of a license will not be accepted where it is aimed at pre-empting supervisory actions by the CBB. A voluntary surrender will only be allowed to take effect once the licensee, in the opinion of the CBB, has discharged all its regulatory responsibilities to clients.

          Added: April 2019

      • Cancellation of a License by the CBB

        • CRA-1.3.4

          As provided for under Article 48 (c) of the CBB Law, the CBB may itself move to cancel a license, for instance if a licensee fails to satisfy any of its existing license conditions or protecting the legitimate interests of clients or creditors of the licensee require a cancellation. The CBB generally views the cancellation of a license as appropriate only in the most serious of circumstances, and generally tries to address supervisory concerns through other means beforehand.

          Added: April 2019

        • CRA-1.3.5

          Cancellation of a license requires the CBB to issue a formal notice of cancellation to the licensee concerned. The notice of cancellation describes the CBB's rationale for the proposed cancellation, as specified in Article 48(d) of the CBB Law.

          Added: April 2019

        • CRA-1.3.6

          Where the cancellation of a license has been confirmed by the CBB, the CBB will only effect the cancellation once a licensee has discharged all its regulatory responsibilities to clients. Until such time, the CBB will retain all its regulatory powers towards the licensee and will direct the licensee so that no new regulated crypto-asset services may be undertaken whilst the licensee discharges its obligations to its clients.

          Added: April 2019

    • CRA-1.4 CRA-1.4 Publication of the Decision to Grant or Cancel a License

      • CRA-1.4.1

        In accordance with Articles 47 and 49 of the CBB Law, the CBB will publish its decision to grant, cancel or amend a license in the Official Gazette and in two local newspapers, one in Arabic and the other in English.

        Amended: October 2019
        Added: April 2019

      • CRA-1.4.2

        For the purposes of Paragraph CRA-1.4.1, the cost of publication must be borne by the Licensee.

        Added: April 2019

      • CRA-1.4.3

        The CBB may also publish its decision on such cancellation or amendment using any other means it considers appropriate, including electronic means.

        Added: April 2019

    • CRA-1.5 CRA-1.5 Licensing Application Fees

      • CRA-1.5.1

        Applicants seeking a regulated crypto-asset service license from the CBB must pay a non-refundable license application fee of BD 100 at the time of submitting their formal application to the CBB.

        Added: April 2019

      • CRA-1.5.2

        There are no application fees for those seeking approved person status.

        Added: April 2019

    • CRA-1.6 CRA-1.6 Annual License Fees

      • CRA-1.6.1

        Licensees must pay the relevant annual license fee to the CBB, on 1st December of the preceding year for which the fee is due.

        Added: April 2019

      • CRA-1.6.2

        The relevant fees are specified in Rule CRA-1.6.3 below. The fees due on 1st December are those due for the following calendar year, but are calculated on the basis of the firm's latest audited financial statements for the previous calendar year: i.e. the fee payable on 1st December 2013 for the 2014 year (for example), is calculated using the audited financial statements for 2012, assuming a 31st December year end. Where a licensee does not operate its accounts on a calendar-year basis, then the most recent audited financial statements available are used instead.

        Added: April 2019

      • CRA-1.6.3

        The variable annual license fee payable by licensees is 0.25% of their relevant operating expenses, subject to a minimum and a maximum as per the table below:

        S1. No.
        Licensing Category
        Minimum Fees (BD)
        Maximum Fees (BD)
        1.
        Category-1
        2,000
        6,000
        2.
        Category-2
        3,000
        8,000
        3.
        Category-3
        4,000
        10,000
        4.
        Category-4
        5,000
        12,000
        Added: April 2019

      • CRA-1.6.4

        Relevant operating expenses are defined as the total operating expenses of the licensee concerned, as recorded in the most recent audited financial statements available, subject to the adjustments specified in Rule CRA-1.6.5.

        Added: April 2019

      • CRA-1.6.5

        The adjustments to be made to relevant operating expenses are the exclusion of the following items from total operating expenses:

        (a) Training costs;
        (b) Charitable donations;
        (c) CBB fees paid; and
        (d) Non-executive Directors' remuneration.
        Added: April 2019

      • CRA-1.6.6

        For the avoidance of doubt, operating expenses for the purposes of this Section, do not include items such as depreciation, provisions, interest expense, and dividends.

        Added: April 2019

      • CRA-1.6.7

        The CBB would normally rely on the audited accounts of a licensee as representing a true and fair picture of its operating expenses. However, the CBB reserves the right to enquire about the accounting treatment of expenses, and/or policies on intra-group charging, if it believes that these are being used artificially to reduce a license fee.

        Added: April 2019

      • CRA-1.6.8

        Licensees must complete and submit Form ALF (Annual License Fee) to the CBB, no later than 15th October of the preceding year for which the fees are due.

        Added: April 2019

      • CRA-1.6.9

        Licensees are subject to direct debit for the payment of the annual fee and must complete and submit to the CBB a Direct Debit Authorisation Form by 15th September available under Part B of Volume 6 (Capital Markets) CBB Rulebook on the CBB Website.

        Added: April 2019

      • CRA-1.6.10

        For new licensees, the first annual license fee is payable when the license is issued by the CBB. The amount payable is the minimum amount stipulated in Paragraph CRA-1.6.3 for each category of license.

        Added: April 2019

      • CRA-1.6.11

        For the first full year of operation, the licensee would calculate its fee as the floor amount. For future years, the licensee would submit a Form ALF by 15th October of the preceding year for which the fees are due and calculate its fee using its last audited financial statements (or alternative arrangements as agreed with CBB, should its first set of accounts cover an 18-month period).

        Added: April 2019

      • CRA-1.6.12

        Where a license is cancelled (whether at the initiative of the firm or the CBB), no refund is paid for any months remaining in the calendar year in question.

        Added: April 2019

      • CRA-1.6.13

        Licensees failing to comply with this Section may be subject to financial penalties as prescribed by the CBB or may have their licenses withdrawn by the CBB.

        Added: April 2019

    • CRA-1.7 CRA-1.7 Approved Persons

      • General Requirements

        • CRA-1.7.1

          Licensees must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in a licensee. The approval from the CBB must be obtained prior to their appointment, subject to the variations contained in Paragraphs CRA-1.7.3 and Paragraph CRA-1.7.4.

          Added: April 2019

        • CRA-1.7.2

          Controlled functions are those functions occupied by board members and persons in executive positions and include:

          (a) Director;
          (b) Chief Executive or General Manager;
          (c) Head of function;
          (d) Chief Information Security Officer;
          (e) Compliance Officer; and
          (f) Money Laundering Reporting Officer (MLRO).
          Added: April 2019

        • CRA-1.7.3

          In the case of Bahraini regulated crypto-asset service licensee, prior approval is required for all of the above controlled functions. Combination of the above controlled functions is subject to the requirements contained in Paragraph MIR-3.1.3 of Module MIR.

          Added: April 2019

        • CRA-1.7.4

          In the case of overseas crypto-asset service licensees, prior approval is required for controlled function (b) defined as the 'Branch Manager' of the Bahrain branch (however titled by the licensee), (c), (d), (e) and (f). Combination of the above controlled functions is subject to the requirements contained in Paragraph MIR-3.1.3 of Module MIR.

          Added: April 2019

        • CRA-1.7.5

          The CBB may grant an exemption from appointment of some of the controlled functions contained in Paragraph CRA-1.7.2, provided the licensee appoints at least three of the controlled functions (i) Directors, (ii) Chief Executive or General Manager and (iii) Money Laundering Reporting Officer.

          Added: April 2019

        • CRA-1.7.6

          Pursuant to CRA-1.7.5, a licensee seeking exemption from appointment of persons to specific controlled functions must provide in writing to the satisfaction of the CBB:

          (a) nature, scale and complexity of their business and how performance of the controlled function to which no appointment is be made will be managed; provide alternative arrangements which should ensure sound and prudent management and adequate consideration to the interest of clients and the integrity of the market; and
          (b) confirmation that the individual entrusted with additional responsibilities pertaining to a controlled function is of sufficient good repute, possesses sufficient knowledge, skill and experience and ability to commit sufficient time to discharge the additional responsibility.
          Added: April 2019

      • Basis for Approval

        • CRA-1.7.8

          Approval under Paragraph CRA-1.7.1 is only granted by the CBB, if it is satisfied that the person is fit and proper to hold the particular position in the licensee concerned. 'Fit and proper' is determined by the CBB on a case-by-case basis. The definition of 'fit and proper' and associated guidance is provided in Sections MIR-3.3 of Module MIR.

          Added: April 2019

      • Cancellation of Approved Person Status

        • CRA-1.7.9

          In accordance with Paragraphs MIR-3.4.11 of Module MIR and CRA-10.2.12, licensees must promptly notify the CBB in writing when a person undertaking a controlled function will no longer be carrying out that function. If a controlled function falls vacant, the licensee must appoint a permanent replacement (after obtaining CBB approval), within 120 calendar days of the vacancy occurring. Pending the appointment of a permanent replacement, the licensee must make immediate interim arrangements to ensure continuity of the duties and responsibilities of the controlled function affected, provided that such arrangements do not pose a conflict of duties. These interim arrangements must be approved by the CBB.

          Added: April 2019

        • CRA-1.7.10

          The notification should identify if the planned move was prompted by any concerns over the person concerned, or is due to a routine staff change, retirement or similar reason.

          Added: April 2019

        • CRA-1.7.11

          The CBB may also move to declare someone as not 'fit and proper', in response to significant compliance failures or other improper behaviour by that person: see Chapter MIR-3.6 of Module MIR regarding the cancellation of 'fit and proper' approval.

          Added: April 2019

        • CRA-1.7.12

          A Director is any person who occupies the position of a Director, as defined in Article 173 of the Commercial Companies Law (Legislative Decree No. 21 of 2001).

          Added: April 2019

        • CRA-1.7.13

          The fact that a person may have 'Director' in his job title does not of itself make him a Director within the meaning of the definition noted in Paragraph CRA-1.7.12. For example, a 'Director of Marketing', is not necessarily a member of the Board of Directors and therefore may not fall under the definition of Paragraph CRA-1.7.12.

          Added: April 2019

        • CRA-1.7.14

          Licensees must appoint a person to undertake the function of Chief Executive or General Manager. The Chief Executive or General Manager means a person who is responsible for the conduct of the licensee (regardless of actual title). The Chief Executive or General Manager must be resident in Bahrain. This person is responsible for the conduct of the whole of the firm, or, in the case of an overseas crypto-asset exchanger licensee, for all of the activities of the branch.

          Added: April 2019

        • CRA-1.7.15

          The Chief Executive or General Manager of the licensee:

          (a) Must be fully responsible for the executive management and performance of the licensee, within the framework of delegated authorities set by the Board;
          (b) Must devote full-time working hours to the licensee; and
          (c) Must not be employed at any other firm.
          Added: April 2019

        • CRA-1.7.16

          Residency requirements apply to Chief Executives, General Managers or Managing Directors as well as for other controlled functions as specified in Section CRA-2.2.

          Added: April 2019

        • CRA-1.7.17

          Head of function means a person who exercises major managerial responsibilities, is responsible for a significant business or operating unit, or has senior managerial responsibility for maintaining accounts or other records of the licensee.

          Added: April 2019

        • CRA-1.7.18

          Where a firm is in doubt as to whether a function should be considered a controlled function it must discuss the case with the CBB.

          Added: April 2019

        • CRA-1.7.19

          Licensees must designate an employee, of appropriate standing and resident in Bahrain, as compliance officer. The duties of the compliance officer include:

          (a) Having responsibility for oversight of the licensee's compliance with the requirements of the CBB; and
          (b) Reporting to the licensee's Board in respect of that responsibility.
          Added: April 2019