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
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
Previous Article
APRA Reduces Committed Liquidity Facility, Issues Other UpdatesRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.