BAHRAIN Law and Practice Contributed by: Noor Radhi, Fatima Alali, Saifuddin Mahmood and Hasan Sanad, Hassan Radhi & Associates
• issuers shall have acceptable standards of quality, operations, management experience and expertise; • investors and their professional advisers shall be kept fully informed by the issuer of all facts and information that might affect their existing or potential interests in the issuer – in particular, full, accurate and timely disclosure shall be made of any information that may reasonably be expected to have a material effect on the price of, value of or market activity in the securities of issuers; • all holders of any class of securities will be treated fairly and equitably; • directors, officers and advisers of issuers will main - tain the highest standards of integrity, accountabil - ity, corporate governance and responsibility; and • directors of an issuer shall act in the interests of shareholders as a whole. Disclosure Standards of the Bahrain Bourse Disclosure Standards were issued by Bahrain Mon - etary Agency (now known as the CBB) pursuant to its circular dated 3 December 2003. Except for the first chapter, which is superseded by the Offering of Securities Module under Rulebook 6, the Disclosure Standards still apply to listings, public offerings and sales of securities in Bahrain. The Disclosure Standards provide, inter alia: • guidelines for trading by directors and senior man - agement; and • policy pertaining to the immediate public disclo - sure of material information regarding an issuer’s affairs, or about events or conditions in the market that will affect the issuer’s securities, relating to business that would significantly affect the market price or value of any of the issuer’s securities – or that would reasonably be expected to have a major influence on any investor’s decisions. Offering of Securities Module Issued by the CBB This Module contains the CBB’s Directive (as amend - ed from time to time) relating to the issuing and offer - ing of securities. The directive in this Module is appli - cable to all market participants and relevant persons, including but not limited to:
• issuers of securities or any person acting on their behalf; • listed companies; • any person acting for or on behalf of listed compa - nies; and • shareholders of listed companies. This Module describes, among other things, the eli - gibility criteria for issuing securities and the applica - tion procedures for obtaining the regulator’s approv - al. Most importantly, it explains the requirement for companies to prepare a prospectus or offering circular when they offer their securities to the public or on private placement basis. The directors of the com - pany must accept responsibility for the accuracy of the content of such prospectus or offering circular. Takeovers, Mergers and Acquisitions Module of the CBB This Module applies to persons involved in, engaging in or intending to engage in an offer for, takeover or merger or acquisition of a controlling interest (30% or more) in a company whose primary listing of its ordinary equity securities is on a licensed exchange in Bahrain. Each director of an offeror and the offeree company, as well as those acting in concert and their professional advisers, has a responsibility to ensure, insofar as they are reasonably able, that the require- ments of the Module are complied with in transactions that are subject to it. While this Module applies to listed companies in which control may change, as mentioned previously, there are circumstances – such as where an unlisted company is a target of a listed company (reverse take - over) – in which it is necessary to consider the spirit, general principles, standards and rules of this Module wherever it is applicable. When there is any doubt as to whether a proposed course of conduct accords with the spirit, general principles, standards and rules of this Module, parties or their advisers should consult the CBB in advance. 1.4 Stock Exchange Requirements Developments The most recent amendments to the Bahrain Bourse Listing Rules, made in 2024, have strengthened cor - porate governance primarily through enhanced disclo -
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