The Central Bank of Bahrain Licenses Bahrain Clear

Wednesday, June 21, 2017

Bahrain Clear Company announced on Wednesday 12th June 2017 that is has recently obtained a license from the Central Bank of Bahrain (CBB) to carry out all the functions and activities mentioned in the company's Article of Association.

On this occasion, Mr. Abdulkareem Ahmed Bucheery, Chairman of Bahrain Bourse, expressed his gratitude and appreciation to the CBB officials, and the Governor of the CBB in particular, for their professionalism in dealing with the license application submitted by the company. Mr. Bucheery clarified that this comes in line with the efforts of the Bourse to complete the implementation of its strategic plan aimed at developing various aspects of work, provides services in accordance with the international standards adopted in developed markets, and complies with the requirements of the Central Bank of Bahrain.

Mr. Bucheery said that the commencement of Bahrain Clear, which is expected to be announced in the coming weeks, will be a remarkable event in the history of the Capital Market sector in the Kingdom of Bahrain as it is an indication of enhancing the competitiveness of the capital sector in attracting more investments. It will also reflect enhancing the investors' confidence in the components of this sector and its legislative, technical and technological structure. Mr. Bucheery confirmed that Bahrain Clear will enhance the quality and quantity of services provided by the company, and will provide the flexibility required to meet the expectations and needs of the company's clients including issuers of securities, investors, institutions, custodians and others.

Khalifa Bin Ibrahim Al Khalifa, Chief Executive Officer of Bahrain Bourse and the Managing Director of Bahrain Clear, said that the establishment of Bahrain Clear Company practically means the end of separation of duties and responsibilities of clearing, settlement and central depository services from the Bourse, where Bahrain Clear will now be independently responsible for these duties administratively and technically. This means that Bahrain Clear will be able to develop existing services and provide other services to the company's clients in accordance with the international standards adopted in this field.

Shaikh Khalifa confirmed that one of the main objectives of Bahrain Clear is to enhance and diversify the post trade services and keep pace with these services as applied in the advanced markets to ensure the quality of these services and provide them to investors according to international standards. Shaikh Khalifa added that the presence of the Bahrain Clear will contribute in enhancing the confidence of local and foreign investors in the investment climate and environment of the capital sector in the Kingdom of Bahrain.

Sheikh Khalifa also indicated that the establishment of Bahrain Clear will raise the rating of the capital sector in the Kingdom by the rating institutions concerned with assessing the investment climate in the countries. This is expected to encourage investors to inject more investments in order to seize the opportunities available in Bahrain Bourse as well as the various sectors of the national economy.

Shaikh Khalifa explained that Bahrain Clear will undertake a range of activities, including the establishment, management and operation of systems for the deposit, clearing and settlement of securities transactions and derivatives, managing shareholder records directly, in addition to custodian activities and providing all advisory and technical services in the field of depository, clearing and settlement.

Bahrain Clear will also undertake the related services of transactions depository, clearing, settlement, central registry and registration. In addition, Bahrain Clear will handle the support for these activities including opening an investor number for individuals and companies with brokers, the deposit of listed and other companies' securities, the conversion of securities between the brokers’ accounts, transfer of ownership of these securities, settlement and registration of ownership.

Sheikh Khalifa also pointed out that the Bahrain Clear will be responsible of pledging and freezing the shares of listed and non-listed companies, managing the shareholders sharebook of the listed companies and registering members to the Central Depository System for the purpose of trading as well as providing securities services to the custodian. In addition, Bahrain Clear will provide services of companies’ corporate actions including bonus shares, stocks split and stock mergers and acquisition in addition to increment and reduction of capital.

CEO of Bahrain Bourse also added that Bahrain Clear will expand the services of the Central Registry to include the distribution of cash dividends directly to the bank accounts of shareholders in listed and other companies, and manage the meetings of general assemblies of listed companies, including e-voting. Bahrain Clear will also undertake lending and borrowing in securities and short selling and support services to the margin trading service. Bahrain Clear services will also include providing mutual funds services that include information related to mutual funds, providing custodian services to Bahraini investors in other Capital Markets and exchanges, and allowing Bahraini commercial banks to mediate for transactions execution on securities and financial instruments listed on the Bourse. This will enhance the confidence and credibility of the Bourse among all parties involved in the market operations.

It is worth mentioning that Bahrain Clear is a fully owned subsidiary of Bahrain Bourse with a disclosed capital of 5 million Dinars, and a paid up capital of 1 million Dinars. The Board of Directors of Bahrain Clear is headed by Mr. Abdulkareem Ahmed Bucheery, whereas Shaikh Khalifa Bin Ibrahim Al Khalifa is the Vice Chiarman and Mr. Yasser Abdul Jalil Sharifi, Mr. Mohamed Khaled Hamed, Ms. Narjis Faroukh Jamal, and Mr. Mahmoud Abdulaziz Al Meer are board members.