The amendments are part of the bank’s efforts to strengthen the regulatory role
The new requirements are effective immediately
The Central Bank of Bahrain, the body supervising and regulating the work of financial and banking institutions in the Kingdom of Bahrain, has made a number of amendments related to the capital adequacy model for investment companies in the Kingdom of Bahrain, as part of the bank’s efforts to strengthen the regulatory role.
A circular from the Governor of the Central Bank of Bahrain, Rasheed Al-Maraj, stated that as part of the goal of the Central Bank of Bahrain; To enhance its regulatory framework, the CBB issues amendments to the Capital Adequacy Model (Module CA) under the CBB Rules (Volume IV).
The amendments maintained the minimum capital requirements for Tier 1 investment companies to be BD 1,000,000, and Tier 2 investment companies were maintained at BD 1,000,000 if they practice the activity of protecting financial instruments (i.e. custodian) and BD 250,000 in Other cases.
However, the changes affected the category 3 investment companies, as the minimum capital was reduced from 125,000 thousand dinars to 25,000 thousand dinars.
The amendments state that Tier 3 investment firms must maintain sufficient liquid funds representing 25% of operating expenses incurred in the previous fiscal year at all times in the form of cash or liquid assets that can be converted into cash in the short term to cover operating expenses.
The circular stated that the new requirements are considered effective immediately, provided that they are part of the updates of the rule booklets in force in the financial sector.
