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  • GR-4.1 CBB Approval

    • GR-4.1.1

      An investment firm licensee must seek prior written approval from the CBB before transferring any of its business to a third party.

      Amended: July 2007

    • GR-4.1.2

      Rule GR-4.1.1 is intended to apply to circumstances where an investment firm licensee wishes to sell all or part of its business to a third party. It does not apply where an investment firm licensee is simply transferring client assets to a third party, on instruction from the client concerned.

      Amended: July 2007

    • GR-4.1.3

      In the case of a Bahraini investment firm licensee, Chapter GR-4 applies both to its business booked in Bahrain and in the firm's overseas branches. In the case of an overseas investment firm licensee, Chapter GR-4 applies only to business booked in the firm's Bahrain branch.

      Amended: July 2007

    • GR-4.1.4

      In all cases, CBB approval to transfer business will only be given where:

      (a) The transfer of business will not damage or otherwise prejudice the legitimate interests of the licensee's customers;
      (b) The transferee is duly licensed to undertake the business which it is to receive; and
      (c) The CBB is satisfied that the transfer will not breach any applicable laws or regulations, and would not create any supervisory concerns.
      Amended: July 2007

    • GR-4.1.5

      In assessing the criteria outlined in Paragraph GR-4.1.4, the CBB will, amongst other factors, take into account the financial strength of the transferee; its capacity to manage the business being transferred; its track record in complying with applicable regulatory requirements; and (where applicable) its track record in treating customers fairly. The CBB will also take into account the impact of the transfer on the transferor, and any consequences this may have for the transferor's remaining customers.

      Adopted: July 2007

    • GR-4.1.6

      Investment firm licensees seeking to obtain the CBB's permission to transfer business must apply to the CBB in writing, in the form of a covering letter together with supporting attachments. Unless otherwise directed by the CBB, the application must provide:

      (a) Full details of the business to be transferred;
      (b) The rationale for the proposed transfer;
      (c) If applicable, an assessment of the impact of the transfer on any customers directly affected by the transfer, and any mitigating factors or measures;
      (d) If applicable, an assessment of the impact of the transfer on the transferor's remaining business and customers, and any mitigating factors or measures; and
      (e) Evidence that the proposed transfer has been duly authorised by the transferor (such as a certified copy of a Board resolution approving the transfer).
      Adopted: July 2007

    • GR-4.1.7

      Firms intending to apply to transfer business are advised to contact the CBB at the earliest possible opportunity, prior to submitting a formal application, in order that the CBB may determine the nature and level of documentation to be provided and the need for an auditor or other expert opinion to be provided to support the application. The documentation specified in Paragraph GR-4.1.6 may be varied by the CBB, depending on the nature of the proposed transfer, such as the materiality of the business concerned and its impact on customers.

      Amended: July 2007

    • GR-4.1.8

      The CBB's approval may be given subject to any conditions deemed appropriate by the CBB. In all cases where additional requirements are imposed, the CBB shall state the reasons for doing so.

      Adopted: July 2007

    • GR-4.1.9

      At its discretion, the CBB may require that a notice of proposed transfer of business be published in the Official Gazette, and/or in at least two local daily newspapers (one in Arabic, the other in English), in order to give affected customers the right to comment on the proposed transfer. Where such a requirement has been imposed, the CBB's decision on the application will also be published in the Official Gazette and in at least two local daily newspapers. In all such cases, the costs of publication must be met by the transferor.

      Adopted: July 2007

    • GR-4.1.10

      Publication under paragraph GR-4.1.9 will generally only be required where a proposed transfer involves a large number of customers or is otherwise deemed necessary in order to protect customer interests.

      Adopted: July 2007

    • GR-4.1.11

      Investment firm licensees are also reminded of the requirements regarding client assets contained in Module CL (Client Assets).

      Amended: July 2007

    • GR-4.1.12

      The requirements in this Chapter are based on the powers available to the CBB in Article 68 of the CBB Law.

      Amended: April 2013
      Adopted: July 2007

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