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Location: Central Bank of Bahrain Volume 4—Investment Business > Part A > Enforcement & Redress > EN Enforcement > EN-5 Financial Penalties > EN-5.2 CBB Policy
  • EN-5.2 CBB Policy

    • EN-5.2.1

      The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a licensee's or persons' referred to in paragraph (b) of Article (68 bis 1) of the CBB Law behaviour and by limits set in the CBB Law. The CBB intends that the impact of a penalty should derive more from its signalling effect than from the actual amount of money involved.

      Amended: April 2016
      Amended: January 2007

    • EN-5.2.2

      In accordance with Article 132 of the CBB Law, the CBB may publicise the issuance of a financial penalty notice, by way of its website or through other means, where there is a strong case that doing so would help achieve the CBB's supervisory objectives.

      Amended: January 2007

    • EN-5.2.3

      In assessing whether to serve a financial penalty notice, the CBB takes into account the following criteria:

      (a) The seriousness of the contravention, in relation to the requirement(s) concerned;
      (b) The duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management;
      (c) The extent to which the contravention was deliberate or reckless;
      (d) The licensee's past compliance record and conduct following the contravention; and
      (e) The scope of any other action taken by the CBB or other regulators against the licensee, in response to the compliance failures in question.
      Amended: January 2007

    • EN-5.2.4

      Part 11 of the CBB Law outlines instances where financial penalties may be imposed. Examples of the types of compliance failings that may lead to the serving of a financial penalty notice include (but are not limited to):

      (a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the CBB;
      (b) Repeated failures to respond to formal requests for information from the CBB, within the deadlines set;
      (c) The submission of information to the CBB known to be false or misleading; and
      (d) Major failures in maintaining adequate systems and controls in accordance with CBB's requirements, subjecting investors and other customersG to significant risk of financial loss.
      Amended: January 2007

    • EN-5.2.5

      In accordance with Article 125 of the CBB Law, a written notice of a financial penalty must be issued before imposing any financial penalty. The written notice must contain the following information:

      (a) The violations committed by the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law with respect to the CBB Law; the CBB Rulebook; any Directions, Warnings or Formal Requests for Information; or violations of the terms and conditions of the license issued to the licensee;
      (b) Evidence or proof to support the above;
      (c) The level of financial penalty to be imposed; and
      (d) The grace period to be allowed to the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law for challenging the intended penalty (which will not be less than 30 calendar days).
      Amended: April 2016
      Adopted: January 2007

    • EN-5.2.6

      The licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law may either pay the penalty or, pursuant to Article 126 of the CBB Law, may object within the period noted in Sub-Paragraph EN-5.2.5(d). In accordance with Article 127 of the CBB Law, the CBB will consider any objection and make a formal resolution within 30 calendar days of receiving the objection. Thereafter, the resolution and any accompanying penalties are final and must be paid within 30 calendar days.

      Amended: April 2016
      Adopted: January 2007

    • EN-5.2.7 [Deleted]

      Deleted: October 2009

    • EN-5.2.7

      The imposition of a financial penalty does not preclude the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).

      Amended: October 2009
      Amended: January 2007

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