Mahmood Rafique
With the finalization of the legal formalities to register Bahrain Stock Exchange (BSE) as an independent entity, the exchange has become Bahrain Bourse, a closed shareholding company with an authorized capital of BD10 million and paid-up capital of BD2 million.
The Minister of Finance Shaikh Ahmed bin Mohammed Al Khalifa, said on Monday that the Ministry had finalized the legal and administrative procedures of registering “Bahrain Bourse” as a Bahraini Shareholding Closed Company B.S.C (c).
Now located at the Bahrain Financial Harbour (BFH), the BSE was established by Amiri Decree No. 4 in 1987 and officially commenced operations two years later in June 1989.
Experts and businessmen see the transformation as being in line with the best corporate governance and especially it comes at a time when Bahrain’s financial market needs of further development and broadening the scope of business at the bourse.
These steps, according to the Minister, were taken following the issuance of Decree Law No. 60, 2010, which was published in the official gazette No 2980, issued on 30th December 2010, and according to the Commercial Companies Decree Law No. 21 of 2001 and its executive regulations issued by Decree Law No. 6 for 2002.
The Minister said that the new company will be fully-owned by the Government of the Kingdom of Bahrain and will be legally supervised and regulated by the Central Bank of Bahrain (CBB) according to the new CBB law stating that CBB is the regulator for financial institutions. Thus, according to the Minister, Bahrain Stock Exchange will be replaced by Bahrain Bourse with its rights and obligations, and will operate as a commercial company with the right of owning and operating entities for Securities, Settlement, and Central Depository activities.
“This step comes in line with the principles and basic concepts of the Economic Vision 2030, aiming at encouraging investment and meeting the financing needs of projects which seek sustainable development. This will positively reflect on the standard of living of the Bahraini Citizen which is considered the main objective behind all the efforts taken by the Government in all the fields,” Shaikh Ahmed added.
“The transfer of Bahrain Stock Exchange to a company will contribute to meeting the modern administrative requirements of international exchanges, and goes in line with the commercial standards that are considered necessary to meet the rapid developments witnessed in advanced stock exchanges. This will also support the bourse’s capability to play a greater role in the economic development of Bahrain and enhance its capability to attract local and foreign investment,” the Minister added.
Shaikh Ahmed bin Mohammed Al Khalifa also clarified that the new legal structure of Bahrain Bourse would give the bourse more flexibility to carry out the plans required to work commercially in order to achieve profitability.
“The bourse will therefore have more flexibility to work on increasing the number of companies listed, increasing the shares’ turnover, attracting new investors, and enhancing the quality of services provided by the bourse to its clients, whether they are issuers of securities or shareholders at listed companies or investors,” he said
“Bahrain Bourse will provide the framework required to protect investors and ensure an organized fair market for securities in the markets managed by the bourse. The bourse will work on setting up fair foundations and principles for securities’ markets and any other financial instruments and also enhancing these markets. In addition, Bahrain Bourse will enhance its cooperation with other stock exchanges to continue developing and protecting dealing in securities as well as settlement and central depository on both the regional and international level,” he added.
The BSE has grown to become one of the leading emerging stock markets in the region.