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) , Bahrain Bourse published the new Listing Rules on 13th January 2020. The new listing rules aim to clarify the regulatory and organizational framework governing all operational aspects of Bahrain Bourse, particularly future listings. The new Listing Rules will be effective immediately, allowing for companies currently listed on the market a grace period of 3 months to abide by the requirements of the new rules.
The new listing rules apply to all listed securities which are currently listed on the market as well as those interested to list on Bahrain Bourse. The new listing rules aim to regulate the offering of securities in the Kingdom of Bahrain, which includes the conditions of the offer of securities and identifies the requirements of listing and offering, as well as the conditions and requirements of capital changes. In addition, the rules regulate the continuing obligations on issuers whom their securities are listed in the Main Market as well as the suspension of trading listed securities and delisting of listed securities. Further, the Listing Rules also govern the listing of Exchange Traded Funds as well as Real Estate Investment Funds.
Shaikh Khalifa bin Ebrahim Al-Khalifa, Chief Executive Officer of Bahrain Bourse commented stating, “The roll-out of the new listing rules is part of our broader strategic plans to further develop the equities market in order to achieve the next milestone in equity market classification upgrade. Bahrain Bourse had robust discussions over the last year to balance the perspectives of various stakeholders throughout the consultation period for the listing rules.”
“We are constantly working on creating a more flexible and attractive platform for both investors and potential companies, which aims to boost liquidity in the market. The transition period accords listed companies a sufficient timeframe to ensure compliance with the requirements of the listing rules,” added Sh. Khalifa.
In accordance with the Listing Rules, BHB shall become the “main point of contact” for all Applicants and Issuers for matters pertaining the listing application and ongoing obligations, in which issuers of securities and financial instruments interested to list on Bahrain Bourse are required to submit their listing application and supporting documents to Bahrain Bourse directly. The Bourse will then discuss the outcomes of the application review with the Central Bank of Bahrain’s Capital Markets Supervision Directorate, in a period not exceeding 28 days from the application submission date. Following that, BHB will inform the applying issuers of the application review results agreed with the Capital Markets Supervision Directorate following issuing a “No-objection letter” for the listing application.
The Listing Rules also specify the ongoing obligations that Issuers have to comply with following listing on Bahrain Bourse including maintaining a Free Float of at least 10% of the total issued outstanding shares. In addition, an Issuer must sign the deposit of securities agreement with Bahrain Clear, in accordance to article (94) of the CBB Law prior to the listing of its Securities.
In addition, BHB may discretionally impose administrative fines on Issuers for any non-compliance with Listing Rules and any other applicable BHB rules, regulations and Directives. A consultation paper on the administrative fines has been circulated to related parties. The rules also state that all Issuers must have effective systems and internal complaint procedures for handling of complaints made by their investors, as per CBB Rulebook Volume 6 – Dispute Resolution, Arbitration and Disciplinary Proceedings Module. The Bourse Investigation Committee (BIC) shall receive complaints which constitute a violation to BHB’s law.