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CIU-1.5.18

The principal focus of retail CIUs is portfolio diversification and liquidity and as such the investments of a Bahrain domiciled retail CIUs must adhere to prudent limits and standards governing investment portfolio composition, liquidity and risk management. Such limits and standards must be disclosed in the offering documents. The risk management measures must include:

(a) investment policy on avoidance of excessive risk, for example significant exposure to derivatives, indices or other complex financial instruments;
(b) avoidance of excessive leverage and single exposure concentrations including for cash with banks; and
(c) maintenance of adequate cash and liquid funds to meet redemption and distribution needs.
Added: April 2022