Agency Circular OG/121/99 Collective Investment Schemes


19th April, 1999

The General Manager
All FCBs, IBs, OBUs and Representative Offices
The Managing Partner
Selected Law Firms and Auditing Firms

Dear Sir,

Re: Collective Investment Schemes

As you are aware, in accordance with Resolution No. (3) of 1992 dated 24th October, 1992 signed by H.H. Sh. Khalifa Bin Salman Al Khalifa, The Prime Minister, chairman of the Board of Directors of the Bahrain Monetary Agency, the Agency is responsible for the overall licensing and regulation of Collective Investment Schemes in Bahrain. Pursuant to this Resolution, on 18th November, 1992 the Agency issued a Regulation (Agency Circular OG/356/92) concerning the Supervision, Operation and Marketing of Schemes.

As part of the process of developing Bahrain's banking and financial center, the Agency has decided that, effective as of the date of this Circular, it will consider application for authorization and approval to establish Schemes in Bahrain, and/or to market Schemes in/from Bahrain, (1) from banks and other financial institutions operating in/from Bahrain and licensed by the Agency, and (2) from banks and other financial or other institutions which are not operating in/from Bahrain (and, therefore, not licensed by the Agency), but which are institutions of high standing and good reputation and which are operating in/from other reputable international financial centers. Paragraph 1.B of the above Regulation is, therefore, amended to take account of this change.

In addition to meeting the requirements set out in the Regulation (and subsidiary principles issued pursuant thereto), a local representative will to be appointed in Bahrain for Schemes falling under (2) above. This representative, who the Agency would ordinarily expect to be a law firm, accountancy firm or an Agency licensee (and who must be acceptable to the Agency in terms of experience, qualifications and abilities), will act as the person in Bahrain who is responsible for all administrative and other matters pertaining to the Scheme.

Any authorization and approval given for a Scheme falling under (2) above will require the payment to the Agency of an annual fee of Bahraini Dinars Two Thousand (in the case of an "Umbrella Scheme", Bahraini Dinars 2,000 x (1+x) where x is the number of subschemes in the Umbrella Scheme).

Schemes listed on the Bahrain Stock Exchange ordinarily attract separate listing charges. For Schemes falling under (2) above for which the Agency has given its authorization and approval, however, no listing fees will be levied by the Exchange. Separate Commercial Registration fees will, however, be charged by the Ministry of Commerce for the Commercial Registration of any locally incorporated Scheme and for any expansion in the permitted activities of the local representative of a Scheme. The Ministry should be contacted directly in relation to the amount of all such fees.

Queries and/or clarifications in relation to the contents of this Circular should be addressed to Anwar Al Sadah, Director—Financial Institutions' Supervision Directorate at the Agency on phone number 529444. Application forms for authorization and approval of Schemes can be obtained directly from the Directorate.

Yours faithfully,

Abdulla H. Saif