• CRA-2 CRA-2 Licensing Condition

    • CRA-2.1 CRA-2.1 Condition 1: Legal Status

      • CRA-2.1.1

        The legal status of a licensed crypto-asset service licensee must be:

        A. For undertaking Category-1, Category-2 and Category-3 regulated crypto-asset services
        (i) A Bahraini company with limited liability ("W.L.L."); or
        (ii) A Bahraini joint stock company (B.S.C.); or
        (iii) A branch resident in Bahrain of a company incorporated under the laws of its territory of incorporation.
        B. For undertaking Category-4 regulated crypto-asset services (Licensed crypto-asset exchange)
        (i) A Bahraini joint stock company (B.S.C.); or
        (ii) A branch resident in Bahrain of a company incorporated under the laws of its territory of incorporation.
        Added: April 2019

      • CRA-2.1.2

        Where the application is for establishing a branch of an overseas crypto-asset service licensee, an application for licensing will be considered after extensive enquiries into the firm's shareholders, management structure, financial position, its activities and how these activities are regulated.

        Added: April 2019

    • CRA-2.2 CRA-2.2 Condition 2: Mind and Management

      • CRA-2.2.1

        Licensees must have designated place of business within the Kingdom of Bahrain. Licensees with their Registered Office in the Kingdom of Bahrain must maintain their Head Office in the Kingdom. Overseas crypto-asset service licensees must maintain a local management presence and premises in the Kingdom appropriate to the nature and scale of their activities.

        Added: April 2019

      • CRA-2.2.2

        The CBB requires that all approved persons occupying controlled functions outlined in Paragraph CRA-1.7.2, except for Sub-paragraph CRA-1.7.2(a) must be resident in Bahrain.

        Added: April 2019

      • CRA-2.2.3

        Overseas crypto-asset service licensees must seek the CBB's prior approval if some of its controlled functions are resident outside of Bahrain.

        Added: April 2019

    • CRA-2.3 CRA-2.3 Condition 3: Substantial Shareholders

      • CRA-2.3.1

        Licensees must satisfy the CBB that their substantial shareholders are suitable and pose no undue risks to the licensee.

        Added: April 2019

      • CRA-2.3.2

        For the purposes of this Module "substantial shareholder" means a person who alone or together with his associates:

        (a) Holds not less than 5% of the shares in the licensee; or
        (b) Is in a position to control not less than 5% of the votes in the licensee.
        Added: April 2019

    • CRA-2.4 CRA-2.4 Condition 4: Board and Employees

      • CRA-2.4.1

        As per Article 65(a) of the CBB law, those nominated to carry out controlled functions must satisfy CBB's approved person's requirements.

        Added: April 2019

      • CRA-2.4.2

        The definition of controlled functions is contained in Section CRA 1.7, whilst Sections MIR-3.1 to MIR-3.6 of Module MIR sets out CBB's approved person requirements. Applications for approved person status must be submitted using the prescribed approved persons form.

        Added: April 2019

      • CRA-2.4.3

        The licensee's staff must collectively provide a sufficient range of skills and experience to manage the affairs of the licensee in a sound and prudent manner. Licensees must ensure their employees meet any training and competency requirements specified by the CBB.

        Added: April 2019

    • CRA-2.5 CRA-2.5 Condition 5: Financial Resources

      • CRA-2.5.1

        Licensees must maintain a level of financial resources, as agreed with the CBB, adequate for the level of business proposed. The level of financial resources held must exceed at all times the minimum requirements contained in Chapter CRA-3.

        Added: April 2019

      • CRA-2.5.2

        Overseas applicants are required to provide written confirmation from their head office in the form of an undertaking that the head office will provide financial support to the branch sufficient to enable it to meet its obligations as and when they fall due. Overseas applicants must also demonstrate that the company as a whole is adequately resourced for the amount of risks undertaken.

        Added: April 2019

    • CRA-2.6 CRA-2.6 Condition 6: Systems and Controls

      • CRA-2.6.1

        Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate for the scale and complexity of their activities. These systems and controls, at a minimum, must meet the requirements contained in Chapter CRA-5 (Technology Governance and Cyber Security), Chapter CRA-6 (Risk Management) and the requirements of Module HC (High-level Controls) of the CBB Rulebook Volume 6.

        Added: April 2019

      • CRA-2.6.2

        Licensees must maintain adequate segregation of responsibilities in their staffing arrangements, to protect against the misuse of systems or errors. Such segregation must ensure that no single individual has control over all stages of a transaction.

        Added: April 2019

      • CRA-2.6.3

        Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate to address the risks of financial crime occurring in the licensee. These systems and controls must meet the minimum requirements contained in Module AML of the CBB Rulebook Volume 6.

        Added: April 2019

      • CRA-2.6.4

        As part of the licensing approval process, applicants must demonstrate in their business plan (together with any supporting documentation) what risks their business would be subject to and how they would manage those risks.

        Added: April 2019

      • CRA-2.6.5

        Licensees must, in connection with any client assets received in the course of their business, establish and maintain separate client accounts, segregated from those used for their own funds, as specified in Module MIR.

        Added: April 2019

      • CRA-2.6.6

        Licensees providing custody services specified in Paragraph CRA-1.1.6(e), must segregate the personnel, systems and controls to avoid conflicts of interest with other activities undertaken as specified under Paragraph CRA-1.1.6.

        Added: April 2019

      • CRA-2.6.7

        Licensees must additionally comply with the systems and controls requirements set out in Module MIR in Section 4, of the CBB Rulebook Volume 6.

        Added: April 2019

    • CRA-2.7 CRA-2.7 Condition 7: External Auditor

      • CRA-2.7.1

        As per Article 61 of the CBB Law, Licensees must appoint external auditors, subject to prior CBB approval. Licensees must comply with the minimum requirements regarding auditors as set out in MIR-4.8 of Module MIR of the CBB Rulebook Volume 6.

        Added: April 2019

      • CRA-2.7.2

        Applicants must submit details of their proposed external auditor to the CBB as part of their license application.

        Added: April 2019

    • CRA-2.8 CRA-2.8 Condition 8: Other Requirements

      • Books and Records

        • CRA-2.8.1

          Licensees must maintain comprehensive books of accounts and other records, which must be available for inspection within the Kingdom of Bahrain by the CBB, or persons appointed by the CBB, at any time. Licensees must comply with the minimum record-keeping requirements contained in Section MIR-4.6 of Module MIR. Books of accounts must comply with International Financial Reporting Standards (IFRS) and, in the case of Sharia compliant crypto asset service licensees, the Accounting and Auditing Standards of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) the relevant requirements set out in Module MIR in Section 4.6, of the CBB Rulebook Volume 6.

          Added: April 2019

      • General Conduct

        • CRA-2.8.2

          Licensees must conduct their activities in a professional and orderly manner, in keeping with good market practice standards. Licensees must comply with the general standards of business conduct as well as the standards relating to treatment of clients contained in Chapter CRA-4 and CRA-12.

          Added: April 2019

      • Additional Conditions

        • CRA-2.8.3

          Licensees must comply with any other specific requirements or restrictions imposed by the CBB on the scope of their license.

          Added: April 2019

        • CRA-2.8.4

          In addition, the CBB may vary existing requirements or impose additional restrictions or requirements, beyond those already specified for licensees, to address specific risks.

          Added: April 2019