The Central Bank of Bahrain (CBB) has issued revised rules around the use of Collective Investment Undertakings (CIU) designed to streamline the authorisation process for establishing and marketing funds.
The new framework, which was devised as part of a review into all of the CBB’s rulebook, divides the CIUs into two categories – one targetting retail investors and the other focused on accredited and high net-worth investors.
Whereas investors from the first category require the CBB’s prior approval before investing in CIUs, the second category only requires notification to the CBB by the placement agent.
In addition, the new framework has a greater focus on corporate governance, segregation of assets and disclosure standards in line with international best practice, stated the CBB.
According to Shireen Al Sayed, director of the CBB’s regulatory policy unit, the new regulations are combined under a single module to make them “simpler and more market-friendly”.
They are also large principles-based, said Al Sayed, “leaving room for the industry to pave the way for building a sound funds ecosystem thereby boosting growth of the asset management industry.”
The changes have been welcomed by local asset managers. Najla Al Shirawi, chief executive of Bahrain-based Sico, described the updated regulations as “a game changer for local, regional, and global funds seeking an international jurisdiction to domicile their structures”.
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