The Bahrain Monetary Agency (BMA) has expanded the scope of its license for brokerage firms, allowing companies to undertake new lines of business.
The Broking Company License now enables operators, acting as intermediaries between financial institutions, to arrange transactions related to commodities and securities, besides money markets.
“Expansion of the license has been necessitated by the increasing diversity of financial products and instruments, which has resulted in a similar expansion of services being offered by intermediaries,” said Director of Licensing and Policy at the BMA, Ahmed Abdul Aziz Al-Bassam.
In the past, broking firms in Bahrain were licensed to engage solely in money market and foreign exchange transactions. The new licensing guidelines clearly define the role of a broking company and the activities that broking operators may undertake in arranging transactions under three categories --- money markets, commodities and securities.
Brokers undertaking money market transactions may arrange wholesale deposits, foreign exchange transactions and other financial instruments such as certificates of deposits and interest rate swaps.
Commodity brokers may engage in transactions in soft and hard commodities, as well as commodity futures and options contracts. They may arrange transactions in equities, fixed income securities, warrants and depository receipts and derivatives.
The licensing criteria also lay down capital and disclosure requirements and ensure that persons conducting broking activities are suitably qualified. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
