BHB NewsLetter September 2019

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Issue 21 - SEPTEMBER 2019
BAHRAIN CLEAR REQUESTS ALL LISTED COMPANIES’
SHAREHOLDERS TO UPDATE THEIR KYC INFORMATION
BAHRAIN CLEAR ISSUES CONSULTATION PAPER ON THE ENHANCEMENT OF
THE DELIVERY VERSUS PAYMENT (DVP) MODEL FRAMEWORK
Bahrain Clear announced on
Tuesday 16 July 2019 that 79.57%
of shareholders representing
28,208,869,078 shares of the listed
companies on Bahrain Bourse have
been transferred to the Electronic
Registry and deposited in Bah-
rain Clear’s Central Depository
System. This step came as part of
the procedures undertaken by the
companies in compliance with the
Resolution No. (5) of the year 2015
issued by the Chairman of Bahrain
Bourse with respect to amend-
n line with its commitment to
position Bahrain’s capital market
at the forefront of global financial
market standards, Bahrain Clear
announced on Sunday, 21st July
2019 the issuance of a consultation
ment of the listing requirements
of companies at Bahrain Bourse.
The total number of shareholders
carrying physical certificates lack-
ing updated Know Your Customer
(‘KYC’) information even after im-
plementing the Electronic Registry
reached 90,000 shares owned by
82,889 shareholder owning around
7.24 billion shares with a market
cap of BD 1.52 billion in compar-
ison to the total market capitaliza-
tion, which is BD 9.22 billion. Bah-
rain Clear requested shareholders
paper on the proposed Delivery
Versus Payment (DVP) Model
Framework. 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
enhanced DVP Model Framework.
This initiatives comes as part of
Bahrain Clear’s role to enhance
capital markets infrastructure,
with the overall aim of protecting
carrying physical certificates to
update their personal KYC infor-
mation which will facilitate distri-
bution of past unclaimed dividends
withheld by the listed companies.
Listed companies have published
several announcements requesting
for shareholders carrying physical
certificates to visit Bahrain Clear
in order to transfer their physical
certificates to the Electronic Reg-
istry and update their KYC, which
will allow them to have access to
the e-Services available including
clients’ securities transactions.
The enhanced DVP Model will acti-
vate the custody model in the mar-
ket by combining pre-settlement
controls through a custodian trade
confirmation/rejection practice,
with an automated solution to
custodian-broker settlement.
Hence, the suggested framework
will permit local custodians to
reject buy and/or sell trades for
settlement where it has not received
settlement confirmation from
its client or there is a mismatch
swift receipt of future dividends
through direct bank transfers.
It is worth mentioning that Bahrain
Clear is a fully owned subsidiary
of Bahrain Bourse with a disclosed
capital of BD 5 million, and a paid
up capital of BD 1 million. Bahrain
Clear is licensed as a clearing house
by the Central Bank of Bahrain, of-
fering pre and post-trade services
to investors as well as a range of
services including transactions
depository, clearing, settlement,
central registry and registration.
in the settlement confirmation.
The following existing key
features will remain: Settlement of
securities on T+2, pre-validation
of sell orders will be maintained,
the existing securities and cash
settlement timings will be changed
to accommodate handling of
rejected trades, the enhancements
to the DVP model applies only
to settlement of trades by Local
Custodians clients and do not
apply to clients settling trades
through direct trading accounts.