CBB Volume 4: Contents
This Module applies, to all investment firm licenseesG , a comprehensive framework of Rules and Guidance aimed at combating money laundering and terrorist financing. In so doing, it helps implement the FATF Recommendations on combating money laundering and the financing of terrorism & proliferation, issued by the Financial Action Task Force (FATF), that are relevant to investment firm licenseesG . It also helps implement IOSCO guidance in this area. (Further information on these can be found in Chapter FC-9.) The Module also contains measures relating to the combating of fraud in the investment business sector.Amended: October 2014
The Module requires investment firm licenseesG to have effective anti-money laundering ('AML') policies and procedures, in addition to measures for combating the financing of terrorism ('CFT'). The Module contains detailed requirements relating to customer due diligence, reporting and the role and duties of the Money Laundering Reporting Officer (MLRO). Furthermore, examples of suspicious activity are provided, to assist investment firm licenseesG monitor transactions and fulfil their reporting obligations under Bahrain law.
This Module also covers measures in place to combat fraud: these apply to Category 1 investment firmsG and Category 2 investment firmsG . Chapter FC-10 sets out basic requirements regarding measures to deter, detect and report instances of fraud and attempted fraud.Amended: July 2007
This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time to time) regarding the combating of financial crime, and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to all investment firm licenseesG .Amended: January 2011
Amended: January 2007
For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.Amended: January 2007
FC-A.2 Module History
Evolution of ModuleAmended: January 2007
This Module was first issued in April 2006, as part of the first phase of Volume 4 (Investment Business) to be released by the BMA. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.Amended: January 2007
When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 4 was updated in July 2007 to reflect the switch to the CBB; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.Amended: January 2007
A list of recent changes made to this Module is detailed in the table below:
Module Ref. Change Date Description of Changes FC-4.3.1 07/2006 Updated telephone number for the Director, Compliance Directorate. FC-A.1 01/2007 Updated to reflect new CBB Law: new Rule FC-A.1.4 introduced Categorising this Module as a Directive. FC-4.3.1 01/2007 Updated new e-mail address for the Compliance Directorate. FC-3.3.7 04/2008 Clarified to whom in the CBB, the reports required under Paragraph FC-3.3.1 should be submitted to. Table of Contents 07/2008 Added Supplementary Information Documents to Part B. FC-1.1.11 07/2010 Cross reference added. FC-1.2.1, FC-1.2.3, FC-1.2.5, FC-1.9, FC-3.1, FC-3.2.1, FC-3.3.7, FC-4.2.3 and FC-4.3.1 07/2010 Paragraphs amended. FC-1.6 and FC-1.7 07/2010 New sections added regarding enhanced CDD for charities, clubs and societies and “pooled funds'. FC-3.3 07/2010 Heading amended. FC-A.1.4 01/2011 Clarified legal basis. FC-1.6.4 01/2011 Corrected name of Compliance Directorate. FC-3.1.6 01/2011 Amended requirements for position of MLRO. FC-3.1.6 10/2011 Corrected minor typo to be in line with other Volumes of the CBB Rulebook. FC-3.3 10/2011 Amended Section to allow for CBB-approved consultancy firm to do required sample testing and report under Paragraph FC-3.3.1. FC-3.3.5 and FC-3.3.6 01/2012 Amended to reflect the addition of approved consultancy firm. FC 10/2014 Updated to reflect February 2012 update to FATF Recommendations. FC-1.1.11 10/2015 Clarified Rule for incomplete customer due diligence. FC-10.1.4 01/2016 Clarified Rule. FC-1.2.8 07/2016 Change made for consistency across CBB Rulebook. FC-1.5.1 07/2016 Aligned definition of PEPs as per FATF Recommendations. FC-1.5.4 07/2016 Definition of PEPs is already included in Glossary so this guidance paragraph was deleted. FC-4.2.3 07/2016 Updated instructions for STR. FC-1.2.9A 01/2017 Added guidance paragraph on CR printing FC-7.2.1AA 04/2017 Implementing and complying with the United Nations Security Council resolutions requirement. FC-1.1.2B 10/2017 Amended paragraph on CDD requirements. FC-1.2.7 10/2017 Amended paragraph. FC-1.2.8A 10/2017 Added new paragraph on legal entities or legal arrangements CDD. FC-2.2.10 — FC-2.2.11 10/2017 Amended paragraphs on On-going CDD and Transaction Monitoring FC-3.1.3A 10/2017 Added paragraph on combining MLRO or DMLRO position with any other position within the licensee. FC-B.2.4 01/2018 Amended paragraph. FC-1.8.1 01/2018 Amended paragraph. FC-1.10.1 01/2018 Deleted sub-paragraph. FC-4.2.6 01/2018 Amended paragraph. FC-7.1.4 01/2018 Amended paragraph. FC-7.2.2 01/2018 Deleted paragraph. FC-1.1.2 07/2018 Deleted sub-paragraph (a). FC-1.2.1 07/2018 Amended Paragraph deleting the threshold. FC-1.10.2 07/2018 Amended Paragraph. FC-1.10.3 07/2018 Deleted Paragraph. FC-1.10.9 07/2018 Deleted Paragraph. FC-1.10.1 01/2019 Amended references. FC-3.3.2 - FC-3.3.5 01/2019 Amended references. FC-3.3.7 01/2019 Amended references. FC-6.1.2 01/2019 Amended references. FC-1.9.2 10/2019 Amended authority name. FC-3.1.7 10/2019 Amended authority name. FC-3.2.1 10/2019 Amended authority name. FC-4.2.3 10/2019 Amended authority name. FC-4.3.2 10/2019 Amended authority name. FC-7.2.1AA 10/2019 Defined 'without delay'.
Superseded RequirementsAmended: January 2007
Prior to the introduction of this Module, the CBB had issued various regulatory instruments containing requirements covering different aspects of financial crime. These requirements were consolidated and updated into a comprehensive financial crime regulation, issued in January 2006 to all non-bank and non-insurance licensees (including investment firm licensees, except those licensed as Bahrain Stock Exchange brokers). In turn, this new consolidated regulation was transposed, with no major changes, into the initial version of this Module. This and other instruments replaced by this Module are listed below:
Document Ref. Date of Issue Module Ref.
Document Subject BC/17/97 10 Nov 1997 FC-B.1 Money Laundering OG/308/89 14 Oct 1989 FC-B.1 Money Laundering EDBC/6/01 14 Oct 2001 FC-1, FC-4 to FC-7 Re: Money Laundering Module BC/1/02 27 Jan 2002 FC-3 FATF Special Recommendations on Terrorism Financing BC/3/00 5 Mar 2000 FC-1.5 Re: Accounts for Charity Organisations Resolution No 1 31 Dec 2003 FC-1, FC-2, FC-4 to FC-7 Money Laundering (NB This Module replaces Resolution No. 1 with respect to BSE brokers, custodians and registrars only: Resolution No. 1, as amended, continues to apply to the BSE and issuers of securities.) FIS/C/001/2006 2 Jan 2006 FC-A to FC-10 New Financial Crime RegulationAmended: January 2007
Guidance on the implementation and transition to Volume 4 (Investment Business) is given in Module ES (Executive Summary).Amended: July 2010