Bahrain Bourse Establishes ‘Amanat’ Investor Protection Funds Program

As part of Bahrain Bourse’s (“BHB”) continuous efforts to develop the Capital Market in the Kingdom of Bahrain, and in pursuance of Central Bank of Bahrain Resolution No. (11) of 2018 for the implementation of the Self-Regulatory Organization (SRO), Ministerial Cabinet Resolution No. 2020/48-2, Bahrain Bourse establishes ‘Amanat’ Investor Protection Funds Program to ensure investor protection and management and administration of cash dividend distribution for all listed companies. Under the ‘Amanat’ program, two independent funds will be established: ‘Accumulated Cash Dividends Fund’ (unclaimed for a period of 6 months), and the ‘Annual Cash Dividends Fund’. The program will be effective immediately in order to address the growing rate of unclaimed dividends.

The program aims to ensure adequate provision for the treatment of unclaimed dividends. The funds will be credited inter- alia with amounts remaining unclaimed in the dividend accounts of listed companies up to 30^th June 2020, for distribution by Bahrain Clear in accordance with the applicable procedures and guidelines. Applicable penalties shall be imposed on non-compliance of listed companies with the new procedures. Unclaimed dividends for the years prior to the financial year 2019 has been transferred to the ‘Accumulated Cash Dividends Fund’.

Bahrain Clear has been delegated as asset manager of the funds, as well as ensure appropriate investor protection mechanisms are in place, maintain KYC registry, ensure establishment of internal audit policies, review and approve audited statements of the funds, submit appropriate regular reporting to the Board of Directors of Bahrain Bourse on the results of the funds.

Shaikh Khalifa bin Ebrahim Al-Khalifa, Chief Executive Officer of Bahrain Bourse commented stating, “The ‘Amanat’ Investor Protection Funds Program has been established as part of Bahrain Bourse’s continuous effort to develop the capital market infrastructure and ensure market transparency and investor protection.  The roll-out of the Amanat’ Investor Protection Funds Program is part of our broader strategic plans to ensure an up to date and comprehensive investors register in order to enable swift cash dividends transfer in the future.”

 “It is our fiduciary responsibility as an exchange to ensure that the dividends are received by their rightful shareholders. Investors are urged to ensure prompt registration and update of their KYC information in order to receive their dividends swiftly and promptly,” added Sh. Khalifa.

In addition, Bahrain Bourse may discretionally impose administrative fines on Issuers for any non-compliance with the new procedures with an amount not exceeding 1% above Central Bank of Bahrain interest rates. To ensure transparency, the ‘Accumulated Cash Dividends Fund’ and the ‘Annual Cash Dividends Fund’ deposits shall be segregated into an independent account and shall be subject to an independent audited statement.