Bahrain Bourse Issues Consultation Paper on the proposed Administrative Fines Framework

In line with its commitment to position Bahrain’s capital market at the forefront of global financial market standards, Bahrain Bourse announced on Sunday, 24^th November 2019 the issuance of a consultation paper on the proposed administrative fines on Issuers. The proposed consultation paper was disclosed on Bahrain Bourse’s website and distributed to related parties and stakeholders to receive their views and comments prior to the implementation of the administrative fines. 

The proposed framework is being introduced in accordance with Bahrain Bourse (“BHB”) Listing Rules (in final stages of approval) which relates to the powers of Bahrain Bourse to impose administrative fines on issuers in the event of non-compliance with the Listing Rules and any other applicable BHB rules, regulations and directives as deemed appropriate. To ensure appropriate use of this power, Bahrain Bourse intends to establish a framework based on which it will impose Administrative fines for non-compliance with applicable rules, regulations and directives.

Administrative fines vary in amount based on the impact and frequency of the violation under consideration, which can range from BD 500 up to BD 10,000 on each violation and can go up to BD 100,000 for cross-listed companies exceeding 30% of the Issuer’s share capital for each secondary market they are listed on. All cases will be assessed and reviewed by an Issuer Violation Committee formed by Bahrain Bourse. 

Shaikh Khalifa bin Ibrahim Al Khalifa, Chief Executive Officer of Bahrain Bourse commented: “The proposed administrative fines follow an extensive review conducted by Bahrain Bourse team which are aimed at promoting a fair, orderly and transparent trading in Bahrain’s capital market, and in line with Bahrain Bourse’s commitment towards enhancing issuer disclosure standards and transparency in the market which creates a positive impact on investors. The proposed new framework will ensure prompt escalation of non-compliance cases and enforcement of actions and resolutions, and it is based on the principle of ‘proportionality’ whereby fines are based on the materiality of non-compliance conducted by the issuer which may include a number of factors such as number of instances, repeated violations, etc.”

 “The proposed administrative fines aims to ensure a comprehensive enforcement powers in accordance with IOSCO objectives and principles for securities regulation.” Shaikh Khalifa added.

Market participants and interested parties are encouraged to submit their views and comments on the proposed administrative fines framework outlined in the consultation paper available on www.bahrainbourse.com to [email protected] by 5^th December 2019.