MIE-3.6.3
Past version: Effective from 11 Nov 2010 to 30 Jun 2021
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Enforcement actions in respect of the
1) Formal warnings;
2) Directions as per Article 38 of the CBB Law;
3) Financial penalties as per Article 129 of the CBB Law;
4) Placing a licensee under administration as per Article 136 of the CBB Law;
5) Cancellation or amendment of license as per Article 48 of the CBB Law;
6) Cancellation of 'fit and proper' approval under Article 65 of the CBB Law;
In addition to the above, the CBB may also resort to the following enforcement actions under the CBB Law:
(a) Directives under Article 38
i. Cease and Desist Order
An order prohibitingcapital market service providers and members of SROs from continuing an activity. Cease and desist orders can be used as an emergency measure to prevent possible or potential irreparable harm as an interim and temporary injunction, or it can also be used as the outcome of the final investigation and/or enforcement proceedings as a permanent injunction.
An order prohibiting
ii. Freezing Accounts
An order restricting asecurities or securities cash account of a capital market service provider and member of an SRO with the licensed exchanges, clearing houses, central depositories, banks, brokerage firms, etc. This measure generally will be used as an interim measure.
An order restricting a
iii. Specific Directives
An order requiring acapital market service provider and member of an SRO to implement specific measures or checks and balances, to ensure implementation of the CBB Law, rules and regulations.
An order requiring a
iv. Private Warnings
In certain cases despite concerns about aperson 's conduct or evidence of a breach, the CBB may decide that it is not appropriate, having regard to all the circumstances of the case, to bring formal action for a financial penalty or public censure. This is consistent with the CBB's risk-based approach to enforcement. In such cases, the CBB may give a private warning to make the person aware that they came close to being subject to formal action. Typically, the CBB might give a private warning rather than take formal action where the matter giving cause for concern is minor in nature or degree, or where the person has taken full and immediate remedial action. But there can be no exhaustive list of the conduct or the circumstances which are likely to lead to a private warning rather than more serious action. The CBB will take into account all the circumstances of the case before deciding whether a private warning is appropriate.
In certain cases despite concerns about a
(b) Amendment or Revocation of License Under Article 48(e)
The CBB may amend or revoke a license of acapital market service provider , or member of an SRO for contravention of the CBB Law, rules and regulations and the terms and conditions of a license.
The CBB may amend or revoke a license of a
(c) Imposing Restrictions under Article 128
The CBB may impose administrative restrictions uponcapital market service providers , or members of SROs , in order to secure the compliance with the CBB Law, rules and regulations and the terms and conditions of a license.
The CBB may impose administrative restrictions upon
(d) Imposing Financial Penalties under Article 129 of the CBB Law
The CBB may impose financial penalties as an enforcement action for contravention of the CBB Law, rules and regulations and the terms and conditions of a license.
The CBB may impose financial penalties as an enforcement action for contravention of the CBB Law, rules and regulations and the terms and conditions of a license.
(e) Appointing an Observer Member on the Board of the Licensee under Article 130
If imposing administrative restrictions prove to be futile, then the CBB may appoint an observer member on the Board of Directors of thecapital market service provider , or member of an SRO , for a specified period.
If imposing administrative restrictions prove to be futile, then the CBB may appoint an observer member on the Board of Directors of the
(f) Suspension of a Licensee under Article 131
The CBB may suspend acapital market service provider , or member of an SRO , who contravenes the provisions of the CBB Law, rules and regulations and terms and conditions of a license for a period not exceeding 12 months.
The CBB may suspend a
(g) Public Censure under Article 132
The CBB may issue a public statement on breach of the provision of the CBB Law, rules and regulations and terms and conditions of a license.
The CBB may issue a public statement on breach of the provision of the CBB Law, rules and regulations and terms and conditions of a license.
(h) Criminal Sanction under Article 166
The CBB may initiate proceedings for imposing criminal sanctions in respect of offences which result in the violation of Articles 81 or 85 of the CBB Law, ifcapital market service providers , or members of SROs , are involved in such violations.
The CBB may initiate proceedings for imposing criminal sanctions in respect of offences which result in the violation of Articles 81 or 85 of the CBB Law, if
(i) Criminal Sanction under Article 167
The CBB may initiate proceedings for imposing criminal sanctions in respect of market manipulation offences which result in the violation of Article 100 of the CBB Law; i.e. abuse of inside information.
The CBB may initiate proceedings for imposing criminal sanctions in respect of market manipulation offences which result in the violation of Article 100 of the CBB Law; i.e. abuse of inside information.
(j) Criminal Sanction under Article 168
Article 168 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, aperson who contravenes Article (106) of this law is guilty of an offence of market manipulation and shall be liable to imprisonment for a term not exceeding six months and a fine not exceeding Bahraini Dinars ten thousand (10,000) or either penalty."
Article 168 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, a
(k) Criminal Sanction under Article 169
Article 169 of the CBB Law states that "Without prejudice to any greater penalty stated under the Penal Code or any other law, a punishment by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, shall be imposed upon any official or employee of the licensee who acts or permitted an action in violation of Article (134) of this Decree, if he knows or should have known that the licensee is insolvent".
Article 169 of the CBB Law states that "Without prejudice to any greater penalty stated under the Penal Code or any other law, a punishment by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, shall be imposed upon any official or employee of the licensee who acts or permitted an action in violation of Article (134) of this Decree, if he knows or should have known that the licensee is insolvent".
(l) Criminal Sanction under Article 170
Article 170 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law: (1) Aperson shall be liable to imprisonment for a term not exceeding five years and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, if he falsifies, conceals, destroys or otherwise disposes of a document which he knows or he should know that such document is relevant or shall be of relevance to a current investigation or an investigation likely to be conducted in accordance with Chapter (1) of Part 9 of this Law. Any person participates in such an offence shall be liable to the same penalty of the principal offender. (2) A person shall be liable to imprisonment for a term not exceeding three months, or a fine not exceeding three thousand (3,000) Bahraini Dinars, or either penalty, if he intentionally obstructed any investigation carried out by the Central Bank or an investigator appointed by the Central Bank."
Article 170 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law: (1) A
(m) Criminal Sanction under Article 171
Article 171 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, aperson who discloses in bad faith any Confidential Information in contravention of the provisions of Part (8), shall be liable to imprisonment and a fine not exceeding Bahraini Dinars ten thousand (10,000), or either penalty." This criminal sanction is applicable to capital market service providers , or members of SROs who violate Part 8 of the CBB Law.
Article 171 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, a
(n) Criminal Sanction under Article 172
Article 172 of the CBB Law states that "Any legalperson shall be liable and punished under criminal law by a fine not exceeding two hundred thousand Bahraini Dinars, if any of the crimes stated in this Decree are committed in the name or for his account or by means of any of his facilities, and this was a result of any action or gross negligence or by the approval or under covering of any member of the board of directors or any other official of that legal person or any person who acts in such capacity."
Article 172 of the CBB Law states that "Any legal
(o) Criminal Sanction under Article 163
Article 163 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, any officer or employee of a licensee or a listed company shall be punished by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, if he: (1) Concealed any records, information or documents relevant to the activities of the licensee, requested by the Central Bank or anyperson appointed by the Central Bank to conduct an investigation or inspection on the business of the licensee or the listed company, or provides any of them, in a bad faith, with statements or information which proves to be false or misleading or do not reflect the actual financial position of the licensee or the listed company. (2) Concealed from the external auditor any records, information or documents necessary for auditing the accounts of the licensee or the listed company, or provides him in a bad faith, with misleading or inaccurate statements or information which do not reflect the actual financial position of the licensee or the listed company."
Article 163 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, any officer or employee of a licensee or a listed company shall be punished by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, if he: (1) Concealed any records, information or documents relevant to the activities of the licensee, requested by the Central Bank or any
(p) Criminal Sanction under Article 169
Article 169 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, a punishment by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, shall be imposed upon any official or employee of the licensee who acts or permitted an action in violation of Article (134) of this Decree, if he knows or should have known that the licensee is insolvent."
Article 169 of the CBB Law states that "Without prejudice to any greater penalty prescribed under the Penal Code or any other law, a punishment by imprisonment and a fine not exceeding twenty thousand (20,000) Bahraini Dinars, or by either penalty, shall be imposed upon any official or employee of the licensee who acts or permitted an action in violation of Article (134) of this Decree, if he knows or should have known that the licensee is insolvent."