Initial Public Offering- Bahrain
Securities and Assets
Securities is a financial instrument that is negotiable and holds some type of monetary value. It is equivalent to an ownership position in a corporation through stock. Securities can be categorized into three types:
Securities are defined in Volume 6, Glossary of Terms of CBB handbook as shares or bonds issued by shareholding companies, government debt instruments and other such financial instruments as are mentioned therein.
Establishment and Regulations
The Bahrain Bourse (also known as the Bahrain Stock Exchange; BSE) facilitates as a major stock market index that tracks the workings of share holding companies listed with it. The Bahrain Stock exchange also provides a ground for traders to conduct their business on the ground.
Financial Institutions Law 2006, known commonly as the 2006 Law, established the Central Bank of Bahrain as the regulatory authority of BSE.
Bahrain Bourse is the market formed and governed by
- Decree Number 4 of 1987, later repealed and replaced by
- The Law Number 57 of 2009, and
- Decree Number 60 of 2010.
- CBB Law 2006
- CBB Disclosures Standards Book
- CBB Resolution Number 17 of 2012
- CBB Rulebook Volume 6
- CBB Rulebook Volume 7
These laws govern a set of Rules and Regulations such as:
- Internal Regulation
- Money Laundering Regulations
- Trading Rules and Procedures
- Clearing, Settlement, Central Depository and Registry Rules
- Clearing, Settlement, Central Depository and Procedures
- Market Rules
- Bahrain Investment Market Rules
- Listing Rules
In 2010, Bahrain Bourse was established as a shareholding company to replace BSE, as per Law Number 57.
Central Bank of Bahrain was established by the Financial Institutions law 2006 as a regulatory authority responsible for overseeing the main market and the secondary market. Volume 6 of the CBB Rulebook entails all required regulations in relation to the capital markets.
In terms of an IPO, there are various listing requirements a company needs to adhere by before authorization for listing is provided. These are
- Appointment of Advisors
- Appointment of Auditors
- Appointment of PR Agent
- Appointment of Legal Counsel
- Appointment of Investment Bank
- Conduct Financial Due Diligence
- Review financial assets of the company
- IPO coverage supervision
- Legal Due diligence
- Disclosures of the Board of Directors and Management’s shareholding in the company and exposure of crucial personal dealings
- Board of meetings and any major resolutions to be disclosed
The Prospectus is defined in the Glossary in Volume 6 as ‘An offering document that sets forth the plan for a proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision.