CBB issues revised Collective Investment Undertakings regulations | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

CBB issues revised Collective Investment Undertakings regulations | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

The Central Bank of Bahrain (CBB) has conducted a comprehensive review of its Collective Investment Undertakings (CIU) regulations governing the mutual funds industry as part of the CBB’s wider strategy to conduct a comprehensive review to the financial sector regulatory framework. The new framework acknowledges the demands placed by the fast-paced changes in the fund management industry and therefore aims at lightning the administrative processes and simplifying the authorization requirements for establishing and marketing CIUs. The amendments to the regulations focus on dividing CIUs into two broad categories, the first category is targeting retail investors and the second category is targeting accredited and affluent investors. The regulations pertaining to the first category of CIUs contain details regarding the nature of investment in the CIUs and require receiving CBB’s prior approval whereas the second category only requires notification to the CBB by the placement agent. The CIUs targeting retail investors are low risk with proper diversification and risk management, while CIUs targeted towards accredited and affluent investors contain high-risk investments with the aim of delivering high returns. The new regulations emphasize on the importance of key areas such as the corporate governance requirements, high standards of business conduct, safeguarding and segregation