• RP-2 RP-2 Market Conduct of Relevant Persons

    • RP-2.1 RP-2.1 General Requirements

      • RP-2.1.1

        Relevant persons must maintain proper standards of market conduct, in relation to their role with respect to a CIU, in addition to any applicable legal and regulatory requirements, such as those imposed on them by virtue of their license and/or authorisation.

        April 2012

      • RP-2.1.2

        To demonstrate compliance with Rule RP-2.1.1 above, relevant persons must, in relation to their role with respect to a CIU:

        (a) Observe high standards of integrity and fair dealing, including being honest and straightforward in their dealings with clients;
        (b) Take all reasonable steps to identify, and prevent or manage, potential or actual conflicts of interest that could harm the interests of CIU participants (such steps must include, wherever appropriate, declaring such conflicts);
        (c) Act with due skill, care and diligence;
        (d) Act impartially and refrain from any action which may be to the advantage of one CIU and/or its participants, at the expense of another CIU and/or its participants;
        (e) Observe in full any obligations of confidentiality, including with respect to client information. This requirement does not override lawful disclosures;
        (f) Observe proper standards of market conduct, and avoid action that would generally be viewed as improper;
        (g) Take reasonable care to safeguard the assets of the CIU for which they are responsible, and ensure that those assets are kept separate from their own assets and are separately identifiable from the assets of other CIUs with which they are involved;
        (h) Pay due regard to the legitimate interests and information needs of the clients and communicate with them in a fair and transparent manner;
        (i) Act in an open and co-operative manner with the CBB and other regulatory/supervisory bodies under whose authority they come under. They should take reasonable care to ensure that their activities comply with the requirements of Volume 7, all applicable Laws and Regulations (including the Commercial Companies Law), the prospectus of the CIU, and the provisions of the contractual agreements signed with the CIU;
        (j) Take all reasonable steps to rectify any failure to comply with the obligations specified in Sup-paragraph (i), and to notify the CBB of such a breach as soon as it becomes aware of the fact;
        (k) Maintain adequate human, financial and other resources sufficient to run the CIU in an orderly manner;
        (l) Keep accurate accounts and records for each CIU for which it holds assets;
        (m) Take reasonable care to ensure that their affairs are managed effectively and responsibly, with appropriate systems and controls in relation to the size and complexity of their operations. Their systems and controls, as far as is reasonably practical, should also be sufficient to manage the level of risk inherent in their business; and
        (n) Ensure that when outsourcing functions, such outsourcing is properly controlled and that ultimate responsibility for the proper discharge of those functions is retained by the relevant person concerned.
        April 2012

      • RP-2.1.3

        Bahrain domiciled CIUs must, in their terms of engagement with all relevant persons, provide for them to report to the CBB in writing without delay, if they become aware of any of the following:

        (a) The information provided to the CIU's participants or the CBB does not truly reflect the financial situation of the CIU;
        (b) There has been a material breach of the requirements of this Volume 7, the CIU documents, or any directions issued by the CBB;
        (c) There exist circumstances that may materially affect the ability of the CIU to fulfill its obligations to the CIU participants;
        (d) There are material defects in the financial systems, controls or accounting records of the CIU;
        (e) There are material inaccuracies in any reporting provided to the CBB; or
        (f) In the case of the external auditor, if they are likely to qualify any opinion they are to provide in relation to the financial statements of the CIU.
        April 2012

      • RP-2.1.4

        A relevant person of a Bahrain domiciled CIU is presumed by the CBB to be liable for losses suffered by a participant because of that relevant person's unjustifiable failure to perform their/its obligations required under the CIU documents or Volume 7. CBB rules do not permit relevant persons to rely on disclaimers (written or otherwise) that have the effect of restricting their liability beyond what is reasonable and customary in the fund management industry

        April 2012

      • RP-2.1.5

        All relevant persons of Bahrain domiciled CIUs must act in an open and co-operative manner with the CBB and provide it with any information/documentation upon the CBB's request.

        April 2012