Central Bank of Bahrain
  

Capital Markets

Bahrain Bourse (BHB)
Bahrain Bourse (BHB) was established as a shareholding company according to Law No. 60 for the year 2010 to replace Bahrain Stock Exchange (BSE) that was established in 1987. The exchange has grown in the number of listed securities with 49 equities, 11 bonds (both conventional and Islamic) and 31 mutual funds currently listed. As of 2nd April 2012, market capitalization stood at US$16.7 billion.

Trading is carried out through 12 securities brokers active in the market and day-to-day trading takes place through the Automated Trading System (ATS). There is also a Clearing, Settlement and Central Depository System (CDS), which is likewise automated. These two systems have combined to ensure a fast and efficient trading process, ensuring delivery versus payment on a T+2 basis.

Bahrain Financial Exchange (BFX)
The Bahrain Financial Exchange (BFX) was established as a multi-asset exchange to list derivative and cash instruments on multiple asset classes such as currencies, commodities, and securities related products for trading. Bait Al Bursa is an Islamic finance division of the BFX exclusively offering electronic exchange traded Islamic financial instruments. Bait Al Bursa signifies the 'Home of Exchanges', and represents the BFX's vision of providing a single venue for all exchange traded business in the Islamic finance sector.

The CBB has granted the BFX 'final approval' on 18th October 2010, as per the CBB Law and the Markets and Exchanges (MAE) Module of CBB Rulebook Volume 6.

It is owned by the Financial Technologies Group which is a global leader in creating and operating technology centric, next-generation financial markets that are transparent, efficient, and liquid, across multi-asset classes including equities, commodities, currencies and bonds, among others.

To date, the CBB has approved products for trading on the BFX platform including the Gold Futures, the Natural Gas Futures, the Euro-US Dollar Futures, the USDINR Index Futures and Dow Jones Safe India Index Futures.

BFX Clearing and Depository Corporation (BCDC)

The BFX has set-up its Clearing and Depository Corporation (BCDC) as a wholly owned subsidiary of the BFX to clear and settle the contracts traded on the Exchange. As the BFX facilitates trading across multiple time zones spanning from to the USA, special processes are implemented by the BCDC to support clearing in the extended trading window. The BCDC presently ensures the settlement of all the transactions conducted on the BFX platform is completed on a T+1 day basis.

It is licensed as a clearing, settlement and depository institution under the CBB Law and the Clearing, Settlement and Central Depository (CSD) Module of CBB Rulebook Volume 6. It was granted 'final' approval on 5th October 2010.

The capital market is under the regulatory and supervisory oversight of the Central Bank's Capital Market Supervision Directorate, which oversees both the primary and secondary markets. Following the enactment of the Central Bank of Bahrain and Financial Institutions Law 2006, a new and comprehensive set of regulations based on international best practices is being introduced. The capital markets rulebook (comprises Volume 6 of the CBB Rulebook) provides a market and disclosure based system of regulation that promotes transparency and fairness in capital market transactions. It brings together into a single publication the various regulations that currently apply to capital markets activity.

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