Bahrain Bourse Implements the New Market Rules

Bahrain Bourse Implements the New Market Rules

Bahrain Bourse (BHB) will start implementing the 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 “Market Rules.”  

The new “Market Rules” provide improvements overall 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, given that an authorized clearing member should be appointed to settle transactions executed at the Bourse.

In addition, the new rules reduce the number of exceptional cases from sixteen cases to four cases only, which will have a positive impact to BHB main market. Moreover, the “Market Rules” organize 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.

The “Market Rules” outline the general framework for market makers and the mechanisms that should be used to organize 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.

It is worth mentioning that the issuance of the new “Market Rules” comes in line with the goals of the strategy adopted by BHB in 2011 which includes a plan to develop several legislative and technical areas of the Bourse.

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