The Board decided on the implementation date for Market Rules as of 1st of September 2014, whereas brokers will be 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. The rules will provide margin trading that will sequentially enhance the liquidity in the market. The new “Market Rules” also allows 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 “Market Rules” outlines the general framework for market makers and the mechanisms that should be used to organize their buy and sell transactions. A notable area is the reduction of 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” organizes 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.
It is worth mentioning that the issuance of the “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.
The “Market Rules” allows the trading of new investment instruments such as options, ETFs, REITS, and includes other areas related to developing trading mechanisms at the Bourse.
The “Market Rules” includes 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.