Understanding the Central Bank of Bahrain’s Rulebook Volume 6: Capital Markets

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Introduction

The Central Bank of Bahrain (CBB) has published a comprehensive guide for Capital Market Service Providers in the form of Rulebook Volume 6. This document outlines the regulations and guidelines for anti-money laundering (AML), combating financial crime, and implementing a risk-based approach (RBA). If you have specific questions about this rulebook or would like assistance with summarizing key points, please let me know.

Key Concepts

• Risk-Based Approach (RBA): An approach that identifies and assesses the risks of money laundering, terrorist financing, and proliferation financing (ML/TF/PF) to guide Capital Market Service Providers in implementing effective AML/CFT measures.
• Capital Market Service Provider: Institutions providing services such as investment advice, brokerage, portfolio management, etc.

Implementing an RBA Program

Implementing an RBA program is crucial for identifying and mitigating ML/TF/PF risks. Here are some key considerations:

• Identify Risks: Assess the types of risk factors associated with your business operations.
• Assess Risk Levels: Evaluate the likelihood and potential impact of each identified risk factor.
• Implement Mitigation Measures: Develop and implement controls to reduce or mitigate risks.

Examples of Risk Factors to Consider

When assessing ML/TF/PF risks, consider the following factors:

• Geographic Risk: Risks associated with doing business in high-risk jurisdictions.
• Customer Risk: Risks related to customers’ profiles, transactions, and behavior.
• Transaction Risk: Risks linked to specific types of transactions or activities.

Let me know if any of these questions align with your needs or if you have something else in mind. I’ll do my best to help.