Chapter 3 Chapter 3 Administration of the Stock Exchange
First: Board of Directors
Article 4
The Exchange shall be managed by a Board of Directors, chaired by the Minister of Commerce and Agriculture. The Board shall comprise of:
1— A member representing the Ministry of Commerce and Agriculture, who shall be the Deputy Chairman.2— A member representing the Ministry of Finance and National Economy.3— A member representing the Bahrain Monetary Agency.4— Three experienced and competent members to be appointed by the Bahrain Chamber of Commerce and Industry.5— Two members representing the national banks, and auditing and accounting firms, to be appointed by the Chairman.Article 5
The Board of Directors shall exercise all necessary powers and authority to manage the Exchange, and in particular shall be responsible for the following:
1— To formulate the general policies and strategies of the Exchange.2— To issue the regulatory rules for trading in securities, and to set forth rules, procedures and regulations governing the issuing, listing and trading of debt instruments, and determine the prescribed fees.3— To nominate the Director of the Exchange, whose appointment and remuneration shall be determined by a resolution of the Prime Minister.4— To consider applications for the registration of brokers and market makers, and listing of joint stock companies shares, or approving the trading of any other securities on the Exchange, in accordance with the conditions stipulated by the Board in accordance with a resolution to be issued by the Minister.5— To approve the Exchange's budget and final accounts.6— To appoint the auditors.7— To take the necessary action in respect of transactions suspected of being irregular, in accordance with the provisions of the Law, the Internal Regulation and resolutions of the Exchange.8— To temporarily suspend trading on the shares of one or more companies, on the occurrence of any exceptional circumstances which threaten the proper conduct and control of the business of the Exchange.9— To form specialized committees from members of the Board, whether permanent or on a temporary basis, as the Board deems fit.10— To prepare drafts of laws and regulations relating to the business of the Exchange, and determines its objectives.11— To approve the instructions issued by the Director, with respect to the organization of the Exchange and the management of its affairs.12— To determine the transport and travel allowances for the members of the Board when they are assigned for missions related to the Exchange's business.13— To appoint advisors to the Exchange, and fix their terms of service. The Board may delegate this authority to the Director.14— To approve the appointment of the Exchange's employees, as nominated by the Director.15— To determine the working hours and trading days at the Exchange's Trading Floor, according to the circumstances.16— To determine, increase or decrease the brokers' commissions, in accordance with the requirements of the Exchange and the nature of work. Such commissions shall be adopted by a resolution from the Minister.17— To impose fines on members defaulting members of the Exchange and on listed and unlisted companies as well.18— To determine the sources of the Exchange's income.19— Any other important matters, in order to ensure the Exchange's business is conducted in a proper manner for the realization of its objectives.Article 6
Meetings of the Board of Directors shall be held upon the Chairman's invitation, provided that the number of meetings shall not be less than six each year. The invitation for the meeting shall be served at a sufficient time before the prescribed date for the meeting accompanied by the agenda. The Board must be called to convene upon the request of at least four board members. However, for urgent purposes, the Board may be called upon to convene by telephone.
Article 7
The meeting of the Board will only be valid if attended by the majority of the members, including the Chairman. Resolutions shall be adopted by majority vote of the members present, and in the event of matching votes, the Chairman shall have a casting vote. Resolutions shall be duly recorded in a register, to be signed by all members present at the meeting. Voting by proxy or by correspondence shall not be permitted.
Article 8
The Chairman shall preside over the Board's meetings, maintain order, supervise the voting process and declare the result thereof. The Deputy Chairman shall replace the Chairman in his absence.
Article 9
In exceptional urgent situations, where the Chairman deems it necessary to decide on issues within the powers of the Board of Directors, the Chairman may pass the required resolutions if the Board could not meet. The issued resolution shall be submitted for ratification by the Board at its next meeting. The Board may ratify, amend, or reverse such resolutions.
Article 10
The Board may constitute from amongst its members, permanent or temporary committees and determine their authority. The Board and the constituted committees may invite any person to listen to their views on a particular matter. Such persons shall not be entitled to vote.
Article 11
The Board may constitute advisory and other types of committees, as deemed necessary to satisfy the various requirements of the Exchange, and in particular for the following purposes:
1— To propose ways and means for developing the Exchange.2— To find and prescribe the necessary regulations, in order to combat fraudulent and deceptive acts, and acts which affect the Exchange.3— To determine the proper principles and standards to be adopted in accounting and auditing spheres.4— To determine all requirements regarding the publication of information relating to the companies.The Board shall determine the methods of appointing these committees and the exercise of their authorities.
Second: The Director
Article 12
The Exchange shall have a full-time Director, who shall have all the necessary powers required for the management of the Exchange, and the implementation of the Exchange's internal rules and regulations. The Director shall submit to the Board the proposals, regulations, studies and instructions as he deems fit. He shall supervise the technical, administrative and financial departments of the Exchange, and shall issue the necessary instructions in order to perform the duties and responsibilities as delegated to him by the Law, Internal Regulation and resolutions of the Board.
The Director shall be responsible for maintaining order during the trading sessions, and shall have the power to take the necessary measures to expel any person who disturbs the order during trading sessions in the Floor.
The Director shall also be responsible for the implementation of the resolutions adopted by the Board. The Director is the legal representative of the Exchange before the Courts of Law, and in its relations with others, and is entitled to sign on behalf of the Exchange.
Article 13
1— The employees of the Exchange shall be appointed upon the nomination of the Director and the approval of the Board.
The Rules and Regulation applicable to government employees shall apply to the Exchange's employees, until special rules and Regulations applicable to them are issued.2— The management of the Exchange shall endeavour to develop and train the staff required to manage the Exchange, in accordance with modern administration and Technical methods, This shall include also brokers, market makers and other individuals who perform similar functions. The management shall also promote investment awareness amongst those who deal in securities on the Exchange.Article 14
The main functions of the Exchange shall be carried out by various specialized technical and administrative departments, which include:
1—The Operations Department: shall be responsible for the implementation of the trading, clearing and settlement rules, and the follow-up on the trading movement, monitoring the securities prices and their attitudes and, following-up the members affairs. The department is also responsible for monitoring the movement of trading in futures, and proposing suitable basis and rules for the organization of trading in futures operations in terms of size, term, prices and attitudes as compared to spot prices.2— The Administration and Finance Department: shall be responsible for following-up all matters relating to the revenues and expenditures of the Exchange, satisfying all its purchasing needs, and following-up the employees affairs and their training.3— The Studies, Research and Development Department: shall be in charge of all matters relating to the studies, research and financial analysis of the listed companies, and the publication of information relating to the Exchange. The department shall also be responsible for the projection of the trading and price movements and their impact on the economic position of the country. It shall submit proposals for the development of different regulations applicable on the Exchange, and shall collect and analyze information relating to the Exchange, securities and companies, prepare studies, and issue daily bulletins about the transactions and prices.4— The Control and Investigation Department: shall be responsible for the preparation of draft resolutions and laws for the Exchange, follow-up implementation of the Judgements passed by the Exchange, inspection of the Exchange's members and verifying the accuracy of the information and statements issued by the companies and members. It shall also investigate any disputes brought before the arbitration committee and the disciplinary board, and any other matters referred to it by the Director.The Board may establish other departments in the Exchange, to assist in achieving its objectives.
