The Bahrain Financial Exchange (BFX), is directly regulated by the Central Bank of Bahrain (CBB). The CBB, in its capacity as the regulatory and supervisory authority for Bahrain's financial markets, issues regulatory instruments that CBB licensees and other specified persons are legally obliged to comply with. These regulatory instruments are contained in the CBB Rulebook. Much of the Rulebook's substantive content was previously issued by the Bahrain Monetary Agency (BMA), and was carried forward when the CBB replaced the BMA in September 2006. The Module contains the CBB's Directive regarding the User's Guide for Volume 6 of the CBB Rulebook, and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006. The Directive in this Module is applicable to all CBB licensees including their approved persons.
The BFX Business Rules and Regulations are approved by the CBB, governing its operations and as applicable to its intermediaries. The BFX has also set up the BFX Clearing and Depository Corporation (BCDC) and Bait Al Bursa (BAB), an Islamic division of the BFX providing Shariah-compliant Islamic products. The BCDC and BAB have also framed Business Rules governing its operations.
The BFX being a Self Regulatory Organisation (SRO) conforms to high international standards as prescribed by IOSCO with regards to the Exchange's rules, procedures and policies, such as corporate governance and anti-money laundering. The BFX operates its business within the ambit of the laws, statutes, guidelines, orders, directions of the Government of Bahrain and the provisions of its Business Rules and Regulations of the Exchange as approved by the CBB. These Business Rules shall at all times be read subject to the provisions of the laws of the Kingdom of Bahrain and directions and guidelines of the CBB.
The BFX has also put into motion an alternative dispute resolution mechanism, in the interest of its investors, under the provisions of the laws of Bahrain that ensures speedy disposal of disputes among Members and their clients, that saves time and cost.