18/09/23

FAMILY OFFICES: Central Bank of Bahrain issues new regulation in relation to investment services provided by Family Offices

As published on: zawya.com, Monday 18 September, 2023.

The Central Bank of Bahrain (“CBB”) has introduced a new category of investment firms under its Investment Business Regulations - Volume 4 of the CBB Rulebook. The new category is permitted to provide regulated investment and wealth management services to family offices that are subject to the CBB’s supervision.

The regulations were developed to suit the business models of family offices that provide services to multiple wealthy families while maintaining regulatory requirements related to governance and internal controls. This category of license will be able to provide wealth management advice, investment management, custody services, trust services, fund management and insurance advice.

Commenting on the new regulations, Ms. Abeer Al Saad, Executive Director of Financial Institutions Supervision at the CBB, said: "The introduction of Family Office license and related regulations will allow these licensees to provide services that cater to family office business models. This new license allows the provision of multiple investment services by family offices that wish to provide specialised wealth management services to other parties while also meeting the governance and regulatory requirements in addition to customer financial needs and interests.

Commenting on this new regulation, Dalal Buhejji, Executive Director for Business Development – Financial Services at the Bahrain Economic Development Board said: “This new category licence, is a step in the right direction, enhancing Bahrain’s value-proposition as an ideal investment destination by supporting the integration of prominent family offices into the Kingdom. Being the most established sector, and the biggest contributor to GDP, Bahrain’s financial services sector is a testament to the Kingdom’s agile, collaborative regulatory framework, offering a world-class innovation ecosystem right in the heart of the Gulf, backed by Bahrain’s talented, highly skilled pool of workforce.” 

Commenting on the new Family Office Service License, Ms. Ebtisam Al Arrayed, Director of Financial Institutions Supervision Directorate at the CBB, said, "We are delighted to unveil the introduction of a comprehensive license for family offices in the Kingdom of Bahrain, offering them a one-stop solution for their wealth management needs. This initiative empowers family offices to provide a wide array of wealth management services, including trust services and insurance advisory, under a single license. This step reinforces the CBB’s commitment to providing a robust and client-centric financial ecosystem." 

Commenting on the new regulations, Director of Regulatory Policy Unit – Ms. Shireen Al Sayed, said "The CBB strives to continuously enhance its regulations to cater to the needs of the Kingdom’s economy and the developments in the financial sector. The new regulations follow similar initiatives taken by the CBB to revise all the CBB Rulebook Volumes reducing regulatory burden for evolving business models of financial institutions. The new regulations allow family offices to provide a wide range of services to better serve their clients and pave the way for the growth of the asset management industry.”

It is worth noting that these new regulations do not encompass existing family offices unless they expand the scope of their activities by providing investment services to other parties which requires obtaining a CBB license under the new regime.

Tags

Family offices Bahrain Regulation