(a) Carry out a due diligence exercise on prospective
equity crowdfunding issuers planning to use its platform;
(b) Monitor and ensure compliance of its rules;
(c) Carry out investor education programmes;
(d) Ensure the
equity crowdfunding offering statement lodged with the crowdfunding platform operator is verified for accuracy and made accessible to investors through the platform;
(e) Upon approval granted to an
equity crowdfunding issuer to make an equity crowdfunding offer, immediately notify the CBB and file a copy of the following documents with the Capital Market Supervision Directorate:
(i) A letter of approval from the
crowdfunding platform operator clearly mentioning that the equity crowdfunding issuer's application has been verified and approved, and that the crowdfunding offer adheres to the CBB Law, rules and regulations and any other applicable law, rules and regulations;
(ii) A copy of the
equity crowdfunding offering statement filed by the equity crowdfunding issuer; and
(iii) Any amendments to the
equity crowdfunding offering statement filed by the equity crowdfunding issuer.
(f) Inform investors of any material adverse change to the
crowdfunding issuer's proposal as set out under Paragraph MAE-2.11.4;
(g) Ensure that the fundraising limit imposed on an
equity crowdfunding issuer is not breached;
(h) Enter into a signed written agreement with an
equity crowdfunding issue with all applicable terms and conditions. The crowdfunding platform operator and the equity crowdfunding issuer must fulfil all obligations in their respective capacities in accordance with the signed written agreement.
(i) Ensure that adequate policy for identifying and managing the risk of fraud by
equity crowdfunding issuer that, at the minimum:
(i) checks, against information that is readily accessible and information that is otherwise available to the public, the identity of the issuer and information provided by the issuer relating to the identity and satisfy the "fit and proper" requirements of its directors and senior managers; and
(ii) excludes an
equity crowdfunding issuer from using the crowdfunding platform if :
A. It is not satisfied as to the identity of the
equity crowdfunding issuer or of the equity crowdfunding issuer directors and senior managers; or
B. Has reason to believe that any of the
equity crowdfunding issuer's directors or managers do not meet the "fit and proper" requirements. In assessing a person's fitness and propriety, a crowdfunding platform operator must consider previous professional and personal conduct including whether directors or managers has been convicted of offence involving fraud, dishonesty, or has been disqualified by a court, regulator or other competent body as a director or as a manager of a corporation, or has been subject of any disciplinary proceedings, investigation or fines by any government authority, regulatory agency or professional body or association; or
C. Has reason to believe that the
equity crowdfunding issuer is not likely to comply with the obligations imposed on it under the equity crowdfunding platform services.
(j) Appoint a Money Laundering Reporting Officer (MLRO) and comply with the requirements of Module FC of the CBB Rulebook Volume 5 in respect of Anti-Money Laundering and Combating Financial Crime requirements;
(k) Establish effective systematic internal procedures for establishing and verifying the identity of investors and the source of their funds and must undertake investors due diligence (KYC) including FATCA report. Such procedures must be set out in writing and strictly adhered to.
(l) Establish a framework which sets out policies and procedures to effectively and efficiently manage conflicts of interest and the need to have fair, orderly, and transparent systems and procedures to carry out its functions. Such conflicts must be managed in a timely manner.
(m) Ensure that its business activities is restricted to arranging deals by bringing together equity crowdfunding issuers and investors. It must not provide any investment advice to investors.
(n) The board members, shareholders, management and their close family members:
(i) Must not holds any shares or invest in whatever form, in any of the
equity crowdfunding issuers hosted on its platform;
(ii) Must not pay any referrer or introducer, or receive payment in whatever form, including payment in the form of shares, in connection with an
equity crowdfunding issuer hosted on its platform; and
(iii) Must not provide any financial assistance to investors to invest in shares of an
equity crowdfunding issuer hosted on its platform.
(o) Must not invest in an
equity crowdfunding offer to the extent that it operates a crowdfunding platform. In order to undertake investment in crowdfunding issues, a crowdfunding platform operator must obtain a separate license from the CBB for investment activities and also disclose conflicts of interests that may arise between its interest and those of its clients.
(p) Have an adequate policy (a fair dealing policy) for excluding an
equity crowdfunding issuer from using the crowdfunding platform if the provider has information that gives it reason to believe that the equity crowdfunding issuer, in relation to any dealing in shares has:
(i) engaged in conduct that is misleading or deceptive or likely to mislead or deceive; or
(ii) made a false or misleading representation; or
(iii) made an unsubstantiated representation
(q) Ensure cyber-security at all times including the conduct of IT security penetration testing semi-annually by an independent consultant.
(r) Maintain relevant systems in place for mitigating and managing operational and other risks./div>
equity crowdfunding offer towards meeting the offer size within 2 calendar days after reaching 50% and 80% of the offer size.
(s) Subsequent to an
equity crowdfunding offer, the crowdfunding platform operator must submit to the CBB the results of the crowdfunding offer, including an allotment report, within 7 calendar days from the closing date of the offer period.
(t) Ensure that entities engaged in
real estate projects comply with applicable real estate laws;
(u) Provide frequent updates on its platform regarding the progress of an(v) Notify the CBB on the progress of an
equity crowdfunding offer meeting the offer size.
(w) Must be a member of the Bahrain Credit Reference Bureau.
Added: October 2017