The Central Bank of Bahrain (CBB) has released the revised Collective Investment Undertakings (CIU) module of CBB Rulebook Volume 6 dealing with mutual funds, as a consultation paper. 

In June 2007, the CBB introduced the CIU Module, replacing the CBB’s old framework, first issued in 1992.

As a result, the number of mutual funds registered with the CBB rose to 2,819 funds at the end of June 2011, compared to 2,374 funds in June 2007. The net asset value (NAV) of those funds totaled $8.7 billion, said a statement.

The number of Bahrain domiciled funds totaled 127 as of June 2011, compared with 108 funds in June 2007.   Of the total assets of the mutual funds industry, assets of such funds rose to $5.2 billion in June 2011, up from $3.7 billion in June 2007.

“As the mutual funds industry further progressed, the CBB found it is necessary at this stage to expand the CU Module so that it addresses in more details the aspects of corporate governance,” said Abdul Rahman Al Baker, executive director, Financial Institutions Supervision at the CBB.

The revised module is now released for consultation, and is expected to be finalised and issued by the end of the first quarter of 2012.  It expands the current regulations to include re-organisation of the current rules and chapters, and adding new chapters addressing areas the like of corporate governance requirements, and the duties and responsibilities of relevant parties. 

“We foresee that the re-organisation of the CIU Module would certainly make users at more comfort when navigating through the rules” said Mohammed Ayman Al Tajer, director, Financial Institutions Supervision at the CBB.

Additionally, the new framework broadens the range of funds that can be established in Bahrain, by introducing rules and regulations governing Bahrain Real Estate Investment Trusts (B-REITs), in line with best international practices, tailored to serve the needs of the local and regional markets.  It also introduces new rules through which Private Investment Undertakings “PIUs” can be structured.

“We are delighted to introduce the B-REITs rules, as it can serve well for those whom are focused on real estate investment opportunities in this region” said Al Tajer.

“PIUs are new structures that facilitate private investments, and can only be offered to High Net-worth Individuals and Institutional investors, due to the risk characteristics they may exhibit,”  Al Baker added. – TradeArabia News Service