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  • CRA-1.7 CRA-1.7 Approved Persons

    • General Requirements

      • CRA-1.7.1

        Licensees must obtain the CBB's prior written approval in relation to any person wishing to undertake a controlled function in a licensee. The approval from the CBB must be obtained prior to their appointment.

        Amended: April 2023
        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

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.4

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        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 the following controlled functions (i) Directors, (ii) Chief Executive or General Manager, (iii) Compliance Officer and (iv) Money Laundering Reporting Officer.

        Amended: April 2023
        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 should 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 to be made will be managed;
        (b) 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
        (c) 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.
        Amended: April 2023
        Added: April 2019

    • Fit and Proper

      • CRA-1.7.7

        Licensees seeking an approved person authorisation for an individual, must satisfy the CBB that the individual concerned is ‘fit and proper’ to undertake the controlled function in question.

        Amended: April 2023
        Added: April 2019

      • CRA-1.7.8

        Each applicant applying for approved person status and those individuals occupying approved person positions must comply with the following conditions:

        (a) Has not previously been convicted of any felony or crime that relates to his/her honesty and/or integrity unless he/she has subsequently been restored to good standing;
        (b) Has not been the subject of any adverse finding in a civil action by any court or competent jurisdiction, relating to fraud;
        (c) Has not been adjudged bankrupt by a court unless a period of 10 years has passed, during which the person has been able to meet all his/her obligations and has achieved economic accomplishments;
        (d) Has not been disqualified by a court, regulator or other competent body, as a director or as a manager of a corporation;
        (e) Has not failed to satisfy a judgement debt under a court order resulting from a business relationship;
        (f) Must have personal integrity, good conduct and reputation;
        (g) Has appropriate professional and other qualifications for the controlled function in question. All persons proposed to undertake any controlled functions must meet the relevant examination and qualification requirements of the CBB.; and
        (h) Has sufficient experience to perform the duties of the controlled function.
        Amended: April 2023
        Added: April 2019

      • CRA-1.7.8A

        In assessing the conditions prescribed in Paragraph CRA-1.7.8, the CBB will take into account the criteria contained in Paragraph CRA-1.7.8B. The CBB reviews each application on a case-by-case basis, taking into account all relevant circumstances. A person may be considered ‘fit and proper’ to undertake one type of controlled function but not another, depending on the function’s job size and required levels of experience and expertise. Similarly, a person approved to undertake a controlled function with a licensee may not be considered to have sufficient expertise and experience to undertake nominally the same controlled function but in a much bigger licensee.

        Added: April 2023

      • CRA-1.7.8B

        In assessing a person’s fitness and propriety, the CBB will also consider previous professional and personal conduct (in Bahrain or elsewhere) including, but not limited to, the following:

        (a) The propriety of a person’s conduct, whether or not such conduct resulted in a criminal offence being committed, the contravention of a law or regulation, or the institution of legal or disciplinary proceedings;
        (b) A conviction or finding of guilt in respect of any offence, other than a minor traffic offence, by any court or competent jurisdiction;
        (c) Any adverse finding in a civil action by any court or competent jurisdiction, relating to misfeasance or other misconduct in connection with the formation or management of a corporation or partnership;
        (d) Whether the person, or anybody corporate, partnership or unincorporated institution to which the applicant has, or has been associated with as a director, controller, manager or company secretary been the subject of any disciplinary proceeding, investigation or fines by any government authority, regulatory agency or professional body or association;
        (e) The contravention of any financial services legislation;
        (f) Whether the person has ever been refused a license, authorisation, registration or other authority;
        (g) Dismissal or a request to resign from any office or employment;
        (h) Whether the person has been a Director, partner or manager of a corporation or partnership which has gone into liquidation or administration or where one or more partners have been declared bankrupt whilst the person was connected with that partnership;
        (i) The extent to which the person has been truthful and open with supervisors; and
        (j) Whether the person has ever entered into any arrangement with creditors in relation to the inability to pay due debts.
        Added: April 2023

      • CRA-1.7.8C

        With respect to Paragraph CRA1.7.8B, the CBB will take into account the length of time since any such event occurred, as well as the seriousness of the matter in question.

        Added: April 2023

      • CRA-1.7.8D

        Approved persons undertaking a controlled function must act prudently, and with honesty, integrity, care, skill and due diligence in the performance of their duties. They must avoid any conflict of interest arising whilst undertaking a controlled function.

        Added: April 2023

      • CRA-1.7.8E

        In determining where there may be a conflict of interest arising, factors that may be considered will include whether:

        (a) A person has breached any fiduciary obligations to the licensee or terms of employment;
        (b) A person has undertaken actions that would be difficult to defend, when looked at objectively, as being in the interest of the licensee and its clients; and
        (c) A person has failed to declare a personal interest that has a material impact in terms of the person’s relationship with the licensee.
        Added: April 2023

    • Prior Approval Requirements and Process

      • CRA-1.7.8F

        An application for approval for a person occupying a controlled function under Paragraph CRA-1.7.2 must be made by submitting to the CBB a duly completed Form 3 (Application for Approved Person Status) and Curriculum Vitae after verifying that the information in the Form 3, including previous experience is accurate. Form 3 is available under Volume 6 Part B Authorisation Forms CRA Forms of the CBB Rulebook.

        Added: April 2023

      • CRA-1.7.8G

        When the request for approved person status forms part of a license application, it must be marked for the attention of the Director, Licensing and Policy Directorate. When the submission to undertake a controlled function is in relation to an existing licensee, except if dealing with a MLRO, it must be marked for the attention of the Director, Capital Markets Supervision Directorate. In case of the MLRO, Form 3 must be marked for the attention of the Director, Compliance Directorate.

        Added: April 2023

      • CRA-1.7.8H

        When submitting the Forms 3, licensees must ensure that the Form 3 is:

        (a) Submitted to the CBB with a covering letter signed by an authorised representative of the licensee, seeking CBB approval;
        (b) Submitted in original form;
        (c) Submitted with a certified copy of the applicant’s passport, original or certified copies of educational and professional qualification certificates (and translation if not in Arabic or English) and the Curriculum Vitae; and
        (d) Signed by an authorised representative of the licensee and all pages stamped with the licensee’s seal.
        Added: April 2023

      • CRA-1.7.8I

        Licensees seeking to appoint Board Directors must seek CBB approval for all the candidates to be put forward for election/approval at a shareholders’ meeting, in advance of the agenda being issued to shareholders. CBB approval of the candidates does not in any way limit shareholders’ rights to refuse those put forward for election/approval.

        Added: April 2023

      • CRA-1.7.8J

        For existing licensees applying for the appointment of a Director or the Chief Executive/General Manager, the authorised representative should be the Chairman of the Board or a Director signing on behalf of the Board. For all other controlled functions, the authorised representative should be the Chief Executive/General Manager.

        Added: April 2023

    • Assessment of Application

      • CRA-1.7.8K

        The CBB shall review and assess the application for approved person status to ensure that it satisfies all the conditions required in Paragraph CRA-1.7.8 and the criteria outlined in Paragraph CRA-1.7.8B.

        Added: April 2023

      • CRA-1.7.8L

        For purposes of Paragraph CRA-1.7.8I, licensees should give the CBB a reasonable amount of notice in order for an application to be reviewed. The CBB shall respond within 15 business days from the date of meeting all required conditions and regulatory requirements, including but not limited to, receiving the application complete with all the required information and documents, as well as verifying references.

        Added: April 2023

      • CRA-1.7.8M

        The CBB reserves the right to refuse an application for approved person status if it does not satisfy the conditions provided for in Paragraph CRA-1.7.8 and the criteria outlined in Paragraph CRA-1.7.8B. A notice of such refusal is issued to the licensee concerned, setting out the basis for the decision.

        Added: April 2023

    • Appeal Process

      • CRA-1.7.8N

        Licensee or the nominated approved persons may, within 30 calendar days of the notification, appeal against the CBB’s decision to refuse the application for approved person status. The CBB shall decide on the appeal and notify the licensee of its decision within 30 calendar days from submitting the appeal.

        Added: April 2023

      • CRA-1.7.8O

        Where notification of the CBB’s decision to grant a person approved person status is not issued within 15 business days from the date of meeting all required conditions and regulatory requirements, including but not limited to, receiving the application complete with all the required information and documents, licensees or the nominated approved persons may appeal to the Executive Director, Financial Institutions Supervision of the CBB provided that the appeal is justified with supporting documents. The CBB shall decide on the appeal and notify the licensee of its decision within 30 calendar days from the date of submitting the appeal.

        Added: April 2023

    • Notification Requirements and Process

      • CRA-1.7.9

        Licensees must promptly notify the CBB in writing when a person undertaking a controlled function will no longer be carrying out that function together with an explanation as to the reasons for not undertaking the controlled function. In such cases, their approved person status is automatically withdrawn by the CBB. 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.

        Amended: April 2023
        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-1.7.10A

        Licensees must immediately notify the CBB in case of any material change to the information provided in a Form 3 submitted for an approved person.

        Added: April 2023

    • Amendment of Authorisation

      • CRA-1.7.10B

        Licensees must seek prior CBB approval before an approved person may move from one controlled function to another within the same licensee.

        Added: April 2023

      • CRA-1.7.10C

        For the purposes of Paragraph CRA-1.7.10B, a new application should be completed and submitted to the CBB. A person may be considered ‘fit and proper’ for one controlled function, but not for another, if for instance the new role requires a different set of skills and experience.

        Added: April 2023

    • Cancellation of Approved Person Status

      • 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.

        Amended: April 2023
        Added: April 2019

      • CRA-1.7.12

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.13

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.14

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.15

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.16

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        Added: April 2019

      • CRA-1.7.17

        [This Paragraph was deleted in April 2023].

        Deleted: April 2023
        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