Bahrain Bourse implements new market rules

01/09/2014 11:20 AST

Bahrain Bourse (BHB) will start implementing new market rules as of Monday, 1st of September 2014 which were approved by BHB’s Board of Directors in June. Brokers were given a six-month transitional period from the date of implementation to meet the requirements of the new rules.

The new market rules provide improvements over several areas relating to the Bourse’s main operations, and most importantly allow margin trading. The rules also allow non-Bahraini brokers who are licensed by capital market regulatory institutions in their countries to trade in BHB without having a representative office in the Kingdom of Bahrain, so long as an authorised clearing member has been appointed to settle transactions executed at the Bourse. In addition, the new rules reduce the number of exceptional cases from sixteen to four only. Moreover, the rules organise the procedures of issuing licenses to brokers according to new requirements that will contribute to developing the services brokers provide to investors at the Bourse.

The market rules allow the trading of new investment instruments such as options, ETFs, REITS, and include other areas related to developing trading mechanisms at the Bourse. Furthermore, the market rules outline the general framework for market makers and the mechanisms that should be used to organise their buy and sell transactions. The rules also include developing BHB’s independent systems including an Arbitration Committee that will adjudicate on all disputes relating to transactions carried out on the Bourse and a Disciplinary Board to decide on any violation to the Law, Internal Regulation and resolutions which regulate the Bourse, and any violation affecting the conduct of business and discipline in the Bourse.

CPI Financial