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Article 16

First: Natural person:

A natural person can be admitted as a broker or market maker subject to the following conditions:

1— He should be a Bahraini national, resident in Bahrain, with the exception of brokers or market makers who are licensed to practice brokerage or market making business in securities, prior to the implementation of the Bahrain Stock Exchange Law and the Internal Regulation.
2— The broker should carry out brokerage business on a full-time basis.
3— The broker or market maker, must submit to the Exchange final accounts and an annual balance sheet audited by a licensed auditor in accordance with the applicable standards within three months prior to the financial year-end, and shall submit also half-yearly accounts reviewed by a licensed auditor. The Exchange shall have the right to ask, from time to time, for the said documents and information, as and when they are needed (1).
4— He should not be less than twenty-five years of age.
5— He should be of good conduct and behaviour.
6— He should not have been declared bankrupt in Bahrain or abroad, nor previously convicted for a crime and/or by punishment restricting his freedom, or for a crime affecting his integrity or honesty, unless he has been reinstated in all respects.
7— His educational qualifications should not be less than the secondary school certificate or its equivalent. Alternatively, he must be experienced in financial or commercial matters, to an extent that is acceptable to the Board. The Board may amend or add any other qualifications as it deems fit.
8— He shall participate in the Guarantee Fund during his membership in the Exchange's Clearing, Settlement and Central Depository, with a minimum amount of BD10,000.(2)
9— The capital of the market maker should not be less than BD100,000 and the Board may stipulate a higher minimum capital requirement for individual dealers.
10— The broker or market maker shall be obliged to pay all his financial obligations, including fees and commissions payable to the Exchange.
11— He should be registered with the Ministry of Commerce and Agriculture, and be a member of the Bahrain Chamber of Commerce and Industry.
12— He should be aware of the trading and clearing rules applicable on the Exchange.
13— A broker or market maker should not transfer or sell the brokerage or market making licence to any other person, without a prior consent of the Board.
14— He should comply with all other conditions, stipulated by the Board.

Second: Legal person

An entity licensed to carry out brokerage or market making activities shall comply with the following conditions:

1— It should be a Bahraini joint stock company or a limited liability company, whose shareholders are all of Bahraini nationality. The following companies shall be exempted from the above conditions:
a— companies permitted to carry out brokerage or market making activities in accordance with the provisions of Legislative Decree No. (18) of 1975, in respect of the Commercial Companies and their organization.
b— branches of foreign companies and exempt companies which carry out brokerage and market making activities on international securities.
2— The company shall exclusively carry out brokerage or market making activities on securities. It may perform other related activities with the approval of the Board.

As an exception to Article (16) Clause (1) above, foreign brokerage companies may be licensed to undertake the business of securities brokerage or market making on the Exchange, provided that the concerned company should have distinguished experience in the field of securities, deems to enrich the brokerage profession on the Exchange, that could add international dimension to the profession and contribute towards attracting foreign investors.

The same conditions stipulated in the Exchange's Internal Regulation for the admission of Bahrain brokerage companies member at the Exchange shall be applied to foreign brokerage companies subject to the provisions of Article (16) second, in addition to any other conditions specified by the Exchange's Board of Directors(3).
3— Brokerage companies and market making companies must submit to the Exchange final accounts and an annual balance sheet audited by a licensed auditor in accordance with the applicable standards within three months prior to the financial year-end and shall submit also half-yearly accounts reviewed by a licensed auditor. The Exchange shall have the right to ask, from time to time, for the said documents and information, as and when they are needed(4).
4— The employees performing brokerage and market making functions on behalf of their companies must satisfy the following conditions:
a— In respect of the employees in Bahraini companies: he should be a Bahraini national, with educational qualifications of not less than the Investment Representatives Programme Certificate (previously series seven) and a secondary school certificate or equivalent thereof, or alternatively, possess adequate experience in financial and commercial matters, acceptable to the Board.

He should also be of good reputation and exclusively perform his duties on a full-time basis(5).
b— In respect of non-Bahraini companies, branches of foreign companies and exempt companies:

The persons performing brokerage and market making functions may be non-Bahraini with academic qualifications of not less than Investment Representatives Programme Certificate (previously series seven) and a university degree or the equivalent thereof or alternatively should possess sufficient experience in financial and commercial matters acceptable to the Board. He should be of good reputation and exclusively perform his duties on a full-time basis. The Board may amend or add to these qualifications, as it deems fit(6).

As an exception to Article (16) Clause (1) above foreign brokerage companies may be licensed to undertake the business of securities brokerage or market making on the Exchange, provided that the concerned company should have distinguished experience in securities, deems to enrich brokerage profession on the Exchange, that could add international dimension to the profession and contribute towards attracting foreign investors.

The conditions of the acceptance of natural and legal persons as brokers or market makers on the Exchange stipulated in Article (16) of the Exchange's Internal Regulation shall be applied to the non-Bahraini brokers or market makers, in addition to any other conditions to be prescribed by the Exchange's Board of Directors(7).
5— The company, its manager, partners who are authorised to manage the company or those who assume brokerage or market making functions in the company, should not have been declared bankrupt in Bahrain or abroad, or been convicted of an offence, or punishment restricting his freedom or for a crime affecting his integrity or honesty, unless he has been reinstated.
6— The minimum capital of the brokerage company shall be BD30,000 for limited liability companies, and BD200,000 for joint stock companies.

The Board may increase the minimum capital at any time.
7— Companies shall during their membership in the Exchange's Clearing, Settlement and the Central Depository participate, in the Guarantee Contribution Fund with a minimum amount of BD.50,000(8).
8— The minimum capital for a market making company shall be BD200,000. However, the Board may increase it.
9— The company shall be registered with the Ministry of Commerce and Agriculture and a member of the Bahrain Chamber of Commerce and Industry as well.
10— The company's representative should have adequate knowledge of the trading and settlement rules applicable on the Exchange.
11— Any brokerage or market making company should not transfer or sell its brokerage or market making licence to any other company, without the prior consent of the Board.
12— The company shall satisfy any other conditions, stipulated by the Board.

(1) Amended by the Ministerial Resolution No. 1/1999

(2) Amended by Ministerial Resolution No. 4/2000 with respect to the establishment of a Guarantee Contribution Fund at the Bahrain Stock Exchange.

(3) Innovated by Resolution No. 4/1999, Amending certain provisions of the Bahrain Stock Exchange's Internal Regulation.

(4) Amended by Resolution No. 1/1999.

(5) Amended by Resolution No. 2/1999.

(6) Amended by Resolution No. 2/1999.

(7) Amended by Resolution No. 4/1999. In respect of amending certain provisions of the Bahrain Stock Exchange's Internal Regulation.

(8) Amended by Resolution No. 2/2000 in respect of the establishment of the Exchange's collective Guarantee Fund.

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