CBB Addresses Crowdfunding & Outsourcing Rules, Issues Other Updates
The Central Bank of Bahrain (CBB) issued regulations applicable to crowdfunding platform operators, proposed revisions to outsourcing requirements, and published a circular on resolving discrepancies in the Bahrain Credit Reference Bureau, BCRB, reporting. CBB also informed all listed companies and CBB licensees that disclosure of financial impact of COVID-19 in their interim and annual financial statements is no longer mandatory.
Below are the key highlights of these recent developments:
- The regulations for crowdfunding platform operators address equity-based and financing-based crowdfunding and are covered under the Crowdfunding Platform Operators Module (Module CFP) of the CBB Rulebook. The regulations cover principles governing the conduct of operations by the platform, rules on platform offers and disclosures, avoiding conflicts of interest, due diligence of borrowers/issuers through Know Your Customer (KYC), segregation of client money from platform operators, and other measures to ensure safe operation of the activity. The regulations also require crowdfunding platform operators to ensure suitability of the products being offered on the platform to retail clients.
- The outsourcing requirements consultation, which ended on May 11, 2022, specifies, among others, that a licensee must not outsource the certain functions. These functions include compliance, anti-money laundering/combating the financing of terrorism (AML/CFT), financial control, risk management, and business line functions offering regulated services directly to the customers. However, certain support activities, processes and systems under these functions may be outsourced (for example call centers, data processing, credit recoveries, e-KYC solutions). The proposed requirements also specify the requirements that licensees must comply with prior to signing any outsourcing agreement. The proposed revisions to outsourcing requirements will replace the existing outsourcing requirements, as applicable. Examples of services that are typically outsourced include data processing, cloud services, customer call centers, and back-office-related activities
- Furthermore, to reduce the discrepancies and data inconsistencies in the Bahrain Credit Reference Bureau, all licensees are required to immediately conduct a full data cleansing exercise to ensure that all client data (consumer and corporate), regardless of the sector or type of exposure, is accurately reported. The licensees are also required to compare and verify core system data with the Bahrain Credit Reference Bureau data on a quarterly basis, to resolve any discrepancies on a real time basis.
Related Links
- Press Release on Crowdfunding Platform Rules
- Circular on Outsourcing Rules (PDF)
- Consultation on Outsourcing Rules (PDF)
- Circular on COVID-19 Reporting (PDF)
- Circular on Credit Bureau Data (PDF)
Keywords: Middle East And Africa, Bahrain, Banking, Covid-19, Crowdfunding Service Providers, Outsourcing Arrangements, Disclosures, Reporting, AML CFT, CBB Rulebook, Regtech, Cloud Computing, Lending, Credit Risk, Credit Bureau Data Reporting, CBB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
EIOPA Issues Recommendations Post Insurance Stress TestsRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.