CBB Volume 6: Contents
MAE-1.6 Criteria for Granting License
MAE-1.6.1(a) The CBB is satisfied that the establishment of a marketG or exchange to be operated by a personG will;(i) Develop the financial sector and enhance confidence therein; and(ii) Protect the interests of investors in the marketG and exchanges and enhance the Kingdom's credibility as an international financial centre; and(b) The CBB is satisfied that the personG , having applied to be a licensed exchangeG or licensed market operatorG under this Module, is able to comply with the obligations or requirements imposed on licensed exchangesG or licensed market operatorsG .Amended: April 2013
MAE-1.6.2(a) The size and structure, or proposed size and structure, of the marketG to be operated by the applicant;(b) The nature of the services provided, or to be provided, by the marketG to be operated by the applicant;(c) The nature of the securitiesG or futures contractsG traded, or to be traded, on the marketG to be operated by the applicant;(d) The nature of the investors or participantsG , or proposed investors or participantsG , who may use or have an interest in the marketG to be operated by the applicant;(e) Whether the applicant is regulated by the CBB under this Module or any other law;(f) That the rules and by-laws of an applicant are in conformity with such conditions as may be prescribed with a view to ensure fair dealing and to protect investors;(g) That the applicant is willing to comply with any other conditions (including conditions as to the number of membersG ) which the CBB, having regard to the the nature of the securitiesG dealt with by it, may impose;(h) The proposed trading and settlement systems comply with up-to-date industry standards;(i) The personsG who may be affected in the event that the applicant, or the marketG to be operated by the applicant, runs into difficulties;(j) Where the head office or principal place of business of the applicant is outside Bahrain, whether the applicant in the country or territory in which the head office or principal place of business of the applicant is situated, is subject to requirements and supervision comparable to those in the Kingdom of Bahrain;(k) The interests of the public; and(l) Any other circumstances that the CBB may consider relevant.Amended: April 2016
The applicant must additionally be able to demonstrate to the CBB and the CBB must be satisfied that it has:(a) The financial resources, and the management and human resources with appropriate experience, necessary for the operation of a marketG or exchange;(b) Made arrangements for the proper supervision of all transactions effected through the marketG or exchange so as to ensure compliance with its rules;(c) Taken sufficient steps to maintain security and back-up procedures to ensure the integrity of the records of transactions effected through the marketG or exchange;(d) Insurance, a guarantee or compensation fund or other warranty plans in place to enable it to provide compensation, subject to the business rulesG , to clients; and(e) Made provisions, to the satisfaction of the CBB, for the clearing and settlement of transactions effected through the marketG or exchange and for the management of trade and settlement risk.
In addition, the CBB may, for the purposes of licensing an overseas exchangeG as a licensed market operatorG , have regard in addition to any criteria prescribed under Paragraph MAE-1.6.1 whether adequate arrangements exist for cooperation between the CBB and the financial services regulator responsible for the supervision of the operator in the country or territory in which the head office or principal place of business of the operator is situated.
MAE-1.6.5(a) The relevant laws and practices of the country or territory in which the head office or principal place of business of the operator is situated; and(b) The rules and practices of the operator.