Bahrain's financial sector is well-developed and diversified, consisting of a wide range of conventional and Islamic financial institutions and markets, including retail and wholesale banks, specialized banks, insurance companies, finance companies, investment advisors, money changers, insurance brokers, securities brokers and mutual funds. There are also two licensed exchanges, one licensed clearing settlement and central depository, 4 stock brokers, one licensed securities dealer, 15 licensed securities broker dealers and 6 licensed securities clearing members. The sector is therefore well-positioned to offer a wide range of financial products and services, making it the leading financial centre in the Gulf region.
The financial sector is the largest single employer in Bahrain, with Bahrainis representing over 80% of the work-force. Overall, the sector contributes 27% of Bahrain's Gross Domestic Product (GDP), making it one of the key drivers of growth in the country.
The sector is regulated and supervised by the Central Bank of Bahrain (CBB) (formerly Bahrain Monetary Agency), which since 2002 has functioned as the single regulator for the entire financial system. The CBB's regulatory requirements are contained in the CBB Rulebook, divided into six Volumes, each covering a different segment of the financial system.
The CBB Rulebook contains requirements relating to both the licensing and on-going regulation and supervision of licensees, covering areas such as licensing requirements, capital adequacy, risk management, business conduct, reporting and disclosure requirements, as well as enforcement actions. Volume 6 (currently being developed) also covers requirements relating to the regulation and operation of Bahrain's capital markets.