Central Bank of Bahrain’s Game-Changing Compliance Regulations: A Modern Leap Forward

In September 2006, Bahrain’s financial landscape took a significant step forward with the enactment of the Central Bank of Bahrain and Financial Institutions Law 2006 (CBB Law), marking the end of the outdated BMA Law of 1973 and Insurance Law of 1987.

A New Era for Financial Regulation in Bahrain (2006)

• The CBB Law brought the Central Bank of Bahrain (CBB) to the forefront as the successor organization of the Bahrain Monetary Agency
• Decree No. 64 established the CBB’s mandate, governance, and powers
• It significantly boosted the CBB’s regulatory might with enhanced enforcement capabilities

Extended Regulatory Reach and Powers

• The CBB now effectively regulates financial dealings within Bahrain’s borders
• New regulatory powers over the capital markets and securities sector (Parts 4 and 5)
  • Insider trading
  • Market manipulation

Critical Developments for Financial Risk Management

• Legal foundation for close-out netting in Bahrain law (Part 6)
• A crucial risk management technique in the finance industry
• Ensuring a more robust and risk-averse financial infrastructure

A Modernized Financial Services Legislation in Bahrain

• The CBB Law is a significant legislative step in developing a single regulator for the financial services industry in the kingdom
• Streamlining financial services legislation in Bahrain
• Far-reaching implications that strengthen Bahrain’s position as a regional financial hub