The Central Bank of Bahrain (CBB) is finalizing new regulations that will spawn the development of a regional industry of hedge funds, derivatives and other alternative investment instruments.
Requirements for the registration of such higher risk and volatile instruments in Bahrain are contained in a new regulatory framework for collective investment undertakings (CIUs), which the CBB plans to issue later this month.
The new framework, which updates regulations governing mutual funds, will also introduce Bahrain’s first-ever rules allowing CIUs targeting professional investors. It will permit exempt schemes subject only to limited regulation (such as hedge funds), but which may only be sold to a high net worth institutional and investor base.
“The CIU regulations address a critical, growing and highly dynamic segment of Bahrain’s financial sector, the funds industry,” said Abdul Rahman Al Baker, executive director of financial institutions supervision at CBB, whose responsibilities include the supervision of CIUs.