Bahrain cbank issues new securities rules
Manama, December 31, 2013
New rules that aim at making Bahrain a preferred centre for issuing of securities have been put in place by the Central Bank of Bahrain (CBB).
"Bahrain has become one of the first countries in the region to have a comprehensive regulatory framework on the issuance, floating and subscription in securities," CBB officials told a Press conference yesterday (December 30), reported the Gulf Daily News, our sister publication.
"The provisions will enhance transparency, market integrity and investors' confidence in Bahrain's capital markets," CBB executive director for financial institutions supervision Abdul Rahman Al Baker said.
The "Regulatory and Supervisory Module on Issuing and Offering of Securities and Sharia-compliant Sukuk offered through public offering or private placements in or from Bahrain" (OFS Module) has been released as a part of CBB's Capital Market Rulebook Volume 6.
It has also been circulated among industry participants.
CBB Governor Rasheed Al Maraj said that the regulator was seeking to encourage companies and other entities to tap capital markets by issuing shares, Sharia-compliant securities, debt instruments or any other type of securities.
Issuances could be for incorporation of new companies or projects, or financing existing businesses or projects, or enhancing the value of investment in companies licensed or operating in or from Bahrain.
Al Maraj said through the new provisions the regulator was committed to reducing the time taken for approval of issuances.
The CBB would also consider extending certain flexibilities to private equity funds, as well as mutual recognition of approval granted by an overseas securities regulator to overseas issuer application if such regulator is acceptable to the central bank.
The decision to accept applications from issuers in other GCC countries that were prepared in accordance with GCC Unified Standards, was a key initiative by the CBB to facilitate integration of GCC securities markets, he said.
The OFS Module contains nine sections and 11 appendices detailing the functions, procedures, roles and responsibilities, documentation, legal and other requirements and rights of issuers and investors.
The provisions are in line with international standards and best practices advised by International Organisation of Securities Commission, which is a global association of securities regulatory agencies.
Requirements set down also aim at establishment of fair value of subscription price.
This is expected to be achieved by mandating the provision of accurate, comprehensive information thus enabling investors to make informed decisions and protect their rights. – TradeArabia News Service