Bahrain Clear Calls for the Registration of Pledged Securities

Monday, February 25, 2019

Bahrain Clear (a wholly-owned subsidiary of Bahrain Bourse) announced that all parties involved in pledged securities are required to register the pledges at Bahrain Clear based on Resolution (59/2011) and its amendments issued by the Governor of the Central Bank of Bahrain with respect of “Specifying the Procedures to be followed for Registrations of Pledges and Liens on Securities and the discharging and Lifting of such Pledges and Liens” published in the Official Gazette Issue 3032 dated 29 December 2011.

According to the Resolution, all companies and institutions that provide its services in the capital markets sector, including banks that maintain securities issued by public shareholding companies as a guarantee to its loans and banking services or any other parties related to securities mortgage agreement are required to undertake all necessary steps to ensure its adherence to the requirements of the Resolution and Regulations in general, and to coordinate with Bahrain Clear to register all pending securities pledges in order to abide by registration requirements.

On his part, Sh. Khalifa bin Ebrahim Al-Khalifa, Vice Chairman & Managing Director of Bahrain Clear commented stating: “The implementation of this resolution will provide the market with a clear procedural template to protect the rights and interests of all relevant parties, and to maintain a centralized pledge database and records related to such securities, as well as utilizing Information Technology in this regards.”  

Sh. Khalifa clarified, “All related companies shall undertake the required procedures to ensure the adherence and compliance of its shareholders according to the regulations and requirements of the resolution which will contribute to facilitating and overcoming the difficulties that various related parties face in pledging securities.