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8. Additional Requirements and Exceptions

Without prejudice to the generality of Article (143) of the Commercial Companies Law, in addition to these detailed requirements, all listing documents issued by a new applicant or an existing listed issuer in support of an application for listing of Debt Securities of a class new to listing where those Debt Securities are offered otherwise than to existing shareholders must, as an overriding principle, contain such particulars and information which, according to the particular nature of the issuer and guarantor, in the case of a guaranteed issue, and the Debt Securities for which listing is sought, are necessary to enable an investor to make an informed assessment of the activities, assets, liabilities, profits or losses, financial position and management and prospects of the issuer and guarantor, in the case of a guaranteed issue, and of the rights attaching to such Debt Securities.

The Agency may require disclosure of such additional or alternative items of information as it considers appropriate in any particular case. Conversely, it may be prepared to permit the omission or modification of certain items of information on an exceptional basis where appropriate in particular cases. Consequently, issuers are encouraged to seek informal and confidential guidance from the Agency at the earliest opportunity.

Special requirements or exceptions for each type of Debt Securities are as follows:

8.1 Convertible Debt Securities:
8.1.1 Information concerning the nature of the equity securities or other property offered by way of conversion, exchange, subscription or purchase and the rights attached thereto including, in particular, the voting rights, entitlement to share in profits and, in the event of liquidation, any surplus and any other special rights.
8.1.2 Full details of any property the subject of such conversion, exchange, subscription or purchase rights.
8.1.3 Subject to Article (149) of the Commercial Companies Law, the terms and conditions for conversion, exchange, subscription or purchase and details of the circumstances for or in which they may be amended, including the following information:—
(a) the total number of equity securities or other property subject to such rights;
(b) the period during which such rights may be exercised and the date when this right commences;
(c) the amount payable on the exercise of such rights;
(d) the arrangements for transfer or transmission of such rights;
(e) the rights of the debtholders on the liquidation of the company the equity securities of which are subject to such rights; and
(f) the arrangements for the variation in the subscription or exercise price or number of equity securities or other property to take account of alterations to the share capital of the company the equity securities of which are subject to such rights.
8.1.4 Where the issuer of the convertible Debt Securities is different from the issuer of the relevant equity securities, such items of information, with respect to the issuer of the equity securities as the Agency shall require having regard to the circumstances of the issue and a statement indicating from where any information concerning the issuer of the equity securities contained in the issuing and offering document has been extracted and as to the date of the source of such extraction.
8.1.5 Where the issuer has authorised but unissued capital or is committed to increase its capital, an indication of:—
(a) the amount of such authorised capital or capital increase and, where appropriate, the duration of the authorisation;
(b) the categories of persons having any preferential subscription rights for such additional portions of capital; and
(c) the terms and arrangements for the share issue corresponding to such portions.
8.1.6 If the issuer has shares not representing capital, the number and main characteristics of such shares.
8.1.7 An indication of the persons, so far as known to the issuer, who, directly or indirectly, jointly or severally, exercise or could exercise control over the issuer and particulars of the proportion of the voting capital held. Joint control means control exercised by two or more persons who have concluded an agreement which may lead to their adopting a common policy in respect of the issuer.
8.1.8 Details of the profit or loss per share of the issuer, arising out of the issuer's ordinary business activities, after tax, for each of the last two financial years, where the issuer includes its own annual financial statements in the issuing and offering document. Where the issuer includes only consolidated annual financial statements in the issuing and offering document, it must indicate the consolidated profit or loss per share for each of the last two financial years. This information must appear in addition to that provided in accordance with the first sentence where the issuer also includes its own annual financial statements in the issuing and offering document. If, in the course of the period of two financial years, the number of shares in the issuer has changed as a result, for example, of an increase in or reduction or reorganisation of capital, the profit or loss per share referred to in the first and second sentences must be adjusted to make them comparable; in that event the adjustment formula used must be disclosed.
8.1.9 The amount of the dividend per share for each of the last two financial years, adjusted, if necessary, to make it comparable in accordance with the fourth sentence of paragraph 8.1.8.
8.1.10 Details of the fixed date(s), if any, on which entitlement to dividend arises.
8.1.11 Particulars of any arrangement under which future dividends are waived or agreed to be waived.
8.1.12 Name, registered office and proportion of capital held in respect of each undertaking in which the issuer holds at least 10% of the paid-up capital. These details may be omitted when they are of negligible importance for the purpose of enabling investors and their investment adviser(s) to make an informed assessment of the activities, assets, liabilities, profits or losses, financial position and management of the group at the time the offering document is issued and of the rights attaching to the securities for which application is made.
8.1.13 Summary of the provisions of the issuer's Memorandum and Articles of Association or equivalent documents regarding changes in capital and variation of class rights whether or not such provisions are more stringent than required by law.
8.2 Asset-Backed Securities or Mortgaged-Backed Securities:
8.2.1 The listing document of asset-backed and mortgaged-backed securities must include the following additional information:
(a) a description of the assets used to back the asset-backed securities, or the mortgages used to back the mortgaged-backed securities giving at least the following (where relevant):
(i) the geographical location or legal jurisdiction of the financial assets;
(ii) the pool size and any specified minimum or maximum;
(iii) the types of loans (where applicable);
(iv) the maturity of loans (where applicable);
(v) the size of loans (where applicable);
(vi) the loan to value ratio at origination where the loans in the pool are themselves secured or backed by other assets, if a valuation was available;
(vii) the principal lending criteria and extent to which loans may be included which do not meet these criteria;
(viii) an indication of significant representations and warranties given to the issuer relating to the loan pool;
(ix) the method of origination;
(x) any loan substitution rights;
(xi) any rights or obligations to make further advances;
(xii) main terms of the principal insurance policies relating to default, including the names, and where appropriate, the addresses and a brief description of the providers. Any concentration with one insurer should be disclosed if it is material to the transaction;
(xiii) where the assets or mortgages consist of debt obligations of 10 or less borrowers or where a borrower accounts for 10% or more of the assets, the information required in respect of each borrower will be the same as that which would be required if it were itself the issuer of the securities to be offered unless it is already listed on a recognised stock exchange or the debt obligations are guaranteed by an entity listed on a recognised stock exchange, in which case only the name, address, country of incorporation, nature of business and name of the exchange on which its securities are listed shall be disclosed in respect of the issuer and the guarantor (if applicable). The relationship with the guarantor, if any, shall be included. The terms and conditions of the loans or Debt Securities must be stated, except where the assets are Debt Securities listed on a stock exchange; and
(xiv) where the assets or mortgages consist of debt obligations of more than 10 borrowers, or where a borrower accounts for less than 10% of the assets the general characteristics and descriptions of the borrowers, or classes of borrowers shall be given;
However, due to the nature of the transaction, some of the above requirements may not always be appropriate and additional information may be required. In such cases, the Agency should be consulted at an early stage;
8.2.2 A description of the material risks inherent in the portfolio together with any methods whereby they are sought to be addressed;
8.2.3 A description of the method and a statement of the date of the sale, transfer or assignment of the assets or of any rights in the assets to the issuer;
8.2.4 A description of the structure of the transaction and explanation of the flow of funds including:
(a) how the cash flow from the assets or mortgages (if any) is expected to meet the issuer's obligations to debtholders, in particular, information on any credit enhancements, an indication of where material potential liquidity shortfalls are expected to occur and the availability of any liquidity supports and indication of provisions to cover interest or (income) shortfall risks;
(b) an indication of any investment parameters for the investment of temporary liquidity surpluses;
(c) how payments are collected from borrowers of the loans in the pool;
(d) the order of priority of payments made by the issuer, where relevant to the holders of the class of Debt Securities in question;
(e) the fees payable by the issuer out of cash flow received (for example, fees to the administrator);
(f) details of any other arrangements upon which payments of interest and principal to investors are dependent;
(g) information on whether or not there is any intention to accumulate surpluses in the issuer; and
(h) details of any subordinated debt finance;
8.2.5 The name, address and brief description of the originator of the financial assets or mortgages backing the issue;
8.2.6 The name, address and information to demonstrate the suitability of the administrator together with a summary of the administrator's responsibilities and a summary of the provisions relating to termination of the appointment of the administrator and whether or not an alternative administrator has been appointed, and
8.2.7 The names and addresses and brief description of:
(i) any swap counter-parties and any providers of other material forms of enhancement, as outlined under paragraph 8.2.4 (a); and
(ii) the banks with which the main accounts relating to the transaction are held.
8.2.8 If an issue is guaranteed as to principal and interest by a listed company or a company that is suitable for listing, the Agency may be prepared to accept a shorter form of disclosure as regards the additional information required under these Guidelines if it is satisfied that any information omitted is not material from the point of view of the investors likely to be concerned.
8.2.9 The Agency, for the purpose of giving information with regard to the issuer, subject as set out below, requires that the issuer's directors collectively and individually accept full responsibility for the accuracy of the information contained in this document and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.
8.2.10 The information relating to the underlying issuer(s) or borrower(s) has been accurately reproduced from the information published by that issuer or borrower, so far as the directors of the issuer are aware and are able to ascertain from the information published by the underlying issuer(s) or borrower(s) that no facts have been omitted which would render the reproduced information misleading.
8.2.11 If no other requirement for the preparation of annual financial statements and accounts exists, the Agency may consider an application for a waiver of the requirements in respect of annual financial statements and accounts. If a waiver is granted, the terms and conditions of the issue must include a requirement for the issuer to provide written confirmation to the trustee (or equivalent person), on an annual basis, that no event of default or other matter which is required to be brought to the trustee's attention has occurred.
8.3 States:
8.3.1 Some or all of the following additional information may be required by the Agency to be included:—
(a) details of the organisation and administration of the State;
(b) a description of the economic situation (according to category of issuer):
(i) states
(a) general information;
(b) gross national product by economic sector for the past two years;
(c) production trends in the various economic sectors: breakdown by principal production branches for the past two years;
(d) price, wage and employment trends over the past two years;
(e) export and import trends by economic sector and country over the past two years;
(f) balance of payments;
(g) gold and currency reserves;
(ii) regional authorities
(a) general information;
(b) description of the principal sources of revenue;
(c) production trends in the various economic sectors: breakdown by principal production branches for the past two years;
(iii) local authorities and municipalities
(a) general information;
(b) description of the principal sources of revenue;
(c) finances
(i) income and expenditure for the past two years and budgetary forecasts for the current year;
(ii) public debt for the past two years.
8.3.2 A State may omit the following items of information:—
(a) Responsibility statements.
(b) Name, address and professional qualification of the auditors.
(c) The date and country of incorporation.
(d) Details of the legislation under which the issuer is incorporated.
(e) The address of head office.
(f) Particulars of any other stock exchange on which any part of the equities securities of the issuer is listed.
(g) Details of the registration.
(h) Details of the authorized and paid-up capital.
(i) Information required in the financial statements.
(j) Particulars regarding general and administrative information and nature of business.
8.3.3 States who want to omit any of the above prescribed information should therefore consult the Agency at the earliest possible opportunity.
8.4 Supranationals:—
8.4.1 Some or all of the following additional information may be required by the Agency to be included:—
(a) details and location of the organisation and administration of the Supranational;
(b) a description of the activities of the Supranational;
(c) financial information including at a minimum:
(i) income and expenditure for the past two years and budgetary forecasts for the current year;
(ii) publicly issued debt issued in the past two years.
8.4.2 A Supranational may omit the items of information mentioned under 8.3.2 above.
8.4.3 Supranationals who want to omit any of the above prescribed information should therefore consult the Agency at the earliest possible opportunity.
8.5 State Corporations:
8.5.1 A State corporation may omit the following items of information:
(a) Information about subsidiaries.
(b) Information about the group's activities.
8.5.2 State corporations who want to omit any of the above prescribed information should consult the Agency at the earliest possible opportunity.
8.6 Banks and Financial Institutions:

In exceptional cases, banks who want to omit any of the prescribed information should therefore consult the Agency at the earliest possible opportunity.
8.7 Private Placement or Selectively Marketed Debt Securities:
8.7.1 The information required under 2.1 (c), (d), (e), (g) and 2.2.2 (b), (c) and 2.2.8 and 2.2.9 of the documentary requirements under this Chapter are not applicable.
8.7.2 The following modifications are required with regards to the documentary requirements:
(a) The annual financial statements referred to in 2.2.4 need to be for each of the last two completed financial years.
(b) The responsibility statement referred to in 4.1 may be given by another person or persons considered appropriate by the Agency, including the corporate declaration customarily adopted for selective marketing.
8.8 Guarantors and Guaranteed Issues:
8.8.1 Where issuing and offering is sought for Debt Securities of an issuer guaranteed or secured by another legal entity other than its holding company, the guarantor will be required to comply with the requirements of these Guidelines to the same extent as if such guarantor were the issuer of the relevant Debt Securities, therefore an offering document issued in relation to a guaranteed issue shall contain the same information regarding the guarantor as that regarding the issuer, so that, where appropriate, the "issuer" should be read as applying equally to the guarantor.
8.8.2 The relevant guarantee must be issued in conformity with the law of the place where the guarantor is incorporated or otherwise established and in conformity with the guarantor's Memorandum and Articles of Association or equivalent documents and all authorisations needed for its issue under such law or documents must have been duly given.
8.9 Overseas Issuers:
8.9.1 The Agency may be prepared to permit the omission of certain information where it considers it appropriate and not material. In considering requests for any such omissions, the Agency will have regard to:—
(a) whether the overseas issuer has a listing on a regulated stock market recognised for this purpose by the Agency and conducts its business and makes disclosure according to the accepted standards by the Agency; and
(b) the nature and extent of the regulatory standards and controls to which the overseas issuer is subject in its home market.
8.9.2 The following modifications apply:—
(a) if the overseas issuer does not have a board of directors the statement of responsibility must be made by all the members of the overseas issuer's equivalent governing body and the issuing and offering document should be modified appropriately;
(b) the documents to be offered for review will be the documents corresponding to those mentioned in these Guidelines and where any of such documents are not in the English or Arabic language, certified English or Arabic translations thereof shall be available for review. In particular cases, the Agency may require additional documents to be offered for review; and
(c) overseas issuers which are subject to public reporting and filing obligations in their home market may be permitted to incorporate in issuing and offering documents relevant documents so published. Such documents must be in English, or accompanied by a certified English or Arabic translation.
8.9.3 The Agency may be prepared to agree modifications to the Listing Agreement as it considers appropriate in individual cases. In particular, in the case of an overseas issuer whose primary listing is on another regulated stock market recognised by the Agency, the Agency may accept a Listing Agreement which incorporates equivalent continuing obligations to those imposed by that other stock market.
8.9.4 Conversely, the Agency may impose additional requirements in individual cases. In particular, if the overseas issuer's equity capital has or is to have a primary listing on the exchange, the Agency may impose such additional requirements and equivalent information as it considers necessary to ensure that investors have the same protection as that afforded to them in Bahrain.
8.9.5 Attention is particularly drawn to the obligations regarding the circulation and contents of an annual financial statement, accounts and other required documents, to ensure simultaneous release of information to other exchanges and to the market in Bahrain.

In addition, attention is particularly drawn to the requirement for the external auditor to be independent both of the overseas issuer and of any other company concerned.
8.9.6 Audited financial statements will not normally be regarded as acceptable unless the relevant accounts have been audited to an IFRS or a standard comparable to that required by the Agency.

Reports in respect of overseas issuers are required to conform with accounting standards acceptable to the Agency which will normally be at least the IFRS as promulgated from time-to-time by the International Accounting Standards Committee. The relevant standards will normally be those current in relation to the last financial year reported on and, wherever possible, appropriate adjustments should be made to show profits or losses for all periods in accordance with such standards.
8.9.7 Where the Agency allows reports to be drawn up otherwise than in conformity with accounting standards approved by the International Accounting Standards Committee, the Agency may, having regard to the jurisdiction in which the overseas issuer is incorporated or otherwise established, require the report to contain a statement of the financial effect of the material differences (if any).
8.9.8 Where the figures in the report differ from those in the audited annual financial statements, a statement of adjustments must be submitted to the Agency enabling the figures to be reconciled.