• 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

      This Paragraph was deleted in April 2023]

      Deleted: April 2023
      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) [This Sub-Paragraph was deleted in April 2023].
      (e) 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) [This Sub-Paragraph was deleted in April 2023].
      (i) [This Sub-Paragraph was deleted in April 2023].
      (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 (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; and
      (l) A copy of the applicant's memorandum and articles of association (in draft form for applicants creating a new company).
      (m) [This Sub-Paragraph was deleted in April 2023].
      Amended: April 2023
      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 pursuant to Paragraph CRA-1.2.4 above.

      Amended: April 2023
      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 including the Ultimate Beneficiary Owners (UBO);
      (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;
      (cc) Details of the KYC and customer on-boarding process;
      (d) The proposed Board and senior management of the applicant and the proposed organisational structure of the applicant along with the proposed organization chart and the reporting lines;
      (dd) Detailed full business cycle flow from end to end of the business model;
      (e) An 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;
      (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;
      (g) Details of all banking arrangements for fund transfer as well as any other alternative form of arrangements for transfer of funds;
      (h) A copy of its business continuity plan; and
      (i) A description of the IT system that will be used, including details of how the IT system and other records will be backed up.
      Amended: April 2023
      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 a licensing application that occurs prior to licensing must be reported to the CBB.

      Amended: April 2023
      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

        Articles 44 to 47 of the CBB Law govern the licensing process which stipulate that the CBB will issue its decision within 60 calendar days of an application being deemed complete (i.e. containing all required information and documents). By law, the 60 days' time limit 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.

        Amended: April 2023
        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

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.2.14

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.2.15

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.2.16

        Therefore, 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.

        Amended: April 2023
        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 the issuance of the CBB’s Resolution on granting the license. Failure to do so may constitute grounds for refusing an application and result in a contravention of Article 42 of the CBB Law (which carries a maximum penalty of BD 1 million).

        Amended: April 2023
        Added: April 2019

    • Granting or Refusal of License

      • CRA-1.2.19

        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: April 2023
        Amended: October 2019
        Added: February 2019

      • CRA-1.2.20

        The CBB may reject an application for a license if in its opinion:

        (a) The requirements of the CBB Law or the Rulebook 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: April 2023
        Amended: October 2019
        Added: April 2019

      • CRA-1.2.21

        Where the CBB intends to refuse an application for a license, it must give the applicant 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: April 2023
        Amended: October 2019
        Added: February 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-1.2.25

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

    • Commencement of Operations

      • CRA-1.2.26

        Prior to commencement of operation 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) [This Sub-paragraph was deleted in April 2023];
        (c) The licensee's contact details including telephone and fax number, e-mail address and website;
        (d) [This Sub-paragraph was deleted in April 2023];
        (e) [This Sub-paragraph was deleted in April 2023];
        (f) A copy of the auditor's acceptance to act as auditor for the applicant;
        (g) A certificate from a retail bank operating in Bahrain certifying that the capital is deposited;
        (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) [This Sub-paragraph was deleted in April 2023];
        (l) Any other information as may be specified by the CBB;
        (m) A written confirmation, addressed to the CBB, from a licensed retail bank, stating that necessary banking arrangements, including opening of accounts (both corporate account and client money account) has been made by the applicant; and
        (n) Where the licensee has entered into an agreement with a third party, other than a licensed bank, for the purpose of transfer of funds, a copy of the written agreement between the licensee and the third party.
        Amended: April 2023
        Added: April 2019

      • CRA-1.2.27

        Licensees must commence their commercial operations within 6 months of being granted a license by the CBB, failing which the CBB may cancel the license, in accordance with the provisions of the CBB Law.

        Amended: April 2023
        Added: April 2019

      • CRA-1.2.28

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019