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Location: Central Bank of Bahrain Volume 4—Investment Business > Part A > Introduction > UG User's Guide > UG-A Introduction
  • UG-A Introduction

    • UG-A.1 Purpose

      • Executive Summary

        • UG-A.1.1

          The Central Bank of Bahrain ("the CBB"), in its capacity as the regulatory and supervisory authority for all financial institutions in Bahrain, issues regulatory instruments that licensees and other specified persons are legally obliged to comply with. These regulatory instruments are contained in the CBB Rulebook. Much of the Rulebook’s substantive content was previously issued by the Bahrain Monetary Agency (‘the BMA’), and was carried forward when the CBB replaced the BMA in September 2006.

          Amended: January 2007

        • UG-A.1.2

          The Rulebook is divided into 7 Volumes, covering different areas of financial services activity. These Volumes are being progressively issued. Volumes 1 and 2, covering conventional bank licenseesG and Islamic bank licenseesG respectively, were issued in July 2004 and January 2005; Volume 3, covering insurance licenseesG , was issued in April 2005. This Volume (Volume 4), was issued in April 2006. Volume 5 (covering specialised licenseesG ), and Volume 6 (capital markets) are being issued progressively. Volume 7 on collective investment undertakings (CIUs) was issued in May 2012.

          Amended: July 2012
          Amended: January 2008
          Amended: January 2007

        • UG-A.1.3

          This User's Guide provides guidance on (i) the status and application of the Rulebook, with specific reference to Volume 4 (Investment Business); (ii) the structure and design of the Rulebook; and (iii) its maintenance and version control.

          Amended: January 2007

        • UG-A.1.4

          Volume 4 (Investment Business) covers investment firm licenseesG , i.e. those CBB licensees that solely undertake regulated investment servicesG . It contains prudential requirements (such as rules on minimum capital and risk management); and conduct of business requirements (such as rules on the giving of investment advice and the treatment of client moneyG ). Collectively, these requirements are aimed at ensuring the safety and soundness of CBB-licensed investment firms, and providing an appropriate level of protection to the clients of such firms.

          Amended: January 2007
          Amended: January 2008

        • UG-A.1.5

          For the sake of clarity, Volume 4 (Investment Business) does not cover requirements that are generally applicable to participants in Bahrain's capital markets, irrespective of whether they are a CBB licensee or not, such as disclosure standards with regards to the issuance of securities or rules against insider trading or other forms of market abuse. Nor does it cover requirements applicable to recognised exchanges (such as the Bahrain Stock Exchange) and their related infrastructure (such as central clearing and depository systems), or the membership rules applicable to members of such exchanges. These other requirements are currently issued separately, in the form of individual instruments issued by the CBB's Capital Markets Supervision Directorate, and the Bahrain Stock Exchange; those issued by the CBB’s Capital Markets Supervision Directorate will be re-issued in 2007/08 as Volume 6 of the CBB Rulebook (see Paragraph UG-A.1.2 above).

          Amended: January 2007

      • Legal Basis

        • UG-A.1.6

          This Module contains the CBB's Directive (as amended from time to time) regarding the User's Guide for Volume 4 of the CBB Rulebook, 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 2008
          Added: January 2007

        • UG-A.1.7

          For an explanation of the CBB’s rule-making powers and different regulatory instruments, see Section UG-1.1.

          Added: January 2007

    • UG-A.2 Module History

      • Evolution of Module

        • UG-A.2.1

          This Module was first issued in April 2006 by the BMA, as part of the first phase of Volume 4 (Investment Business) to be released. 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

        • UG-A.2.2

          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.

          Added: January 2007

        • UG-A.2.3

          A list of recent changes made to this Module is provided below:

          Module Ref. Change Date Description of Changes
          UG-A.1 07/2007 Updated to reflect new CBB Law: various references changed and new Rule A.1.6 introduced categorising this Module as a Directive.
          UG-1.2 07/2007 New Rules UG-1.2.6 and UG-1.2.7 to reflect the CBB Law; other material reordered as a consequence.
          UG-A.1.6 01/2008 Corrected that this Module applies only to investment firm licensees (including their approved persons).
          UG-3.2.1 01/2008 Updated CBB policy re distribution of hard copies of Volumes of Rulebook.
          Order Form 01/2008 Amended Order Form to reflect new policy re hard copy availability.
          UG-A.1.6 01/2011 Clarified legal basis.
          UG-2.1.2 01/2011 Updated to reflect structure of Volume 5.
          UG-A.1.2, UG-1.2.1 and UG-2.1 07/2012 Various minor corrections to reflect structure of Rulebook, including issuance of Volume 7.
          UG-1.2.1, UG-1.2.7, UG-2.1.2, UG-2.1.3 and UG-2.2.2 10/2012 Various minor amendments.
          UG-3.2 and Annex 01/2013 Amended as CBB Rulebook only now available on CBB Website.
          UG-1.3.4 10/2016 Add section to clarify reference to 'he' 'his' 'she' and 'her'.

      • Superseded Requirements

        • UG-A.2.3

          Deleted: January 2007

        • UG-A.2.4

          Guidance on the implementation and transition to Volume 4 (Investment Business) is given in Module ES (Executive Summary).

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