Manama :The Central Bank of Bahrain (CBB) has introduced new requirements for licensed financial institutions relating to the appointment of board members and senior management.
The new rules are issued under one common Module of the CBB Rulebook, replacing the “fit and proper” requirements which were previously included in the “Licensing Requirements”, “Authorisation” and “Training and Competency” Modules found across all Volumes of the CBB Rulebook.
The new Fit and Proper Module reduces the number of senior managers that require CBB prior approval, removes the prescriptive ‘one size fits all’ qualifications and core competency requirements for senior management positions, and requires the licensees to develop their standards. By reducing the number of prior approvals, CBB will no longer co-manage senior management appointments, holding the board and CEO accountable for the suitability of senior managers, thus making the board and CEO accountable for ensuring the suitability of persons holding senior management positions.
Shireen Al Sayed, Director of the Regulatory Policy Unit, explained that the revised requirements were developed after thorough discussions with the industry and by comparing best practices from leading financial centres. She noted that these updates aim to ease compliance and administrative processes for licensees while maintaining high standards in the financial sector. By simplifying the approval process, the changes give the industry more control in choosing senior management. This adjustment, she added, is important for helping licensees grow in a competitive market.
The new CBB prior approval requirements for the board of directors and senior managers will take effect from April 1, whilst the remaining requirements will be effective October 1. The Module applies to all CBB licensees and can be accessed under the Common Volume of the CBB Rulebook available on CBB’s website:
