CBB issues new Disclosure Standards, insider trading rules for public companies

The amendments, which were finalized in consultation with industry and relevant market players, relate to the dissemination and publication of the annual and interim financial statements of companies listed on the Bahrain Stock Exchange (BSE). The amendments to the guidelines on insider trading relate to the fixing of the lock-up period, during which insiders shall not deal in their company's shares.

The amendments, which come into effect from 1 January 2008, are contained in Resolution No. 49 of 2007, issued by the Governor of the CBB, and published in the Official Gazette, dated 13 September 2007.

Key highlights of the amendments related to public disclosure by listed companies include:

i)Meetings of the Board of Directors of listed companies to discuss/approve the company's quarterly and annual financial statements shall not be held during the BSE trading session (i.e. between 10am to 12 noon). Also, the dates of such meetings must be fixed in advance and notified to the BSE at least five days before the end of each quarter or the end of the financial year of the company.

ii)All listed companies shall disseminate and publish their annual audited financial statements within 60 days of the end of the financial year, with simultaneous notification to the BSE.

iii)The companies shall disseminate and publish the financial statements for each interim quarter within 45 days of the end of the quarter, with simultaneous notification to the BSE.

The amendments to the guidelines on insider trading require that the lock-up period for all listed companies shall start 15 days before the end of each financial year and each related quarter, until the company publishes its annual financial statements, or its interim quarterly financials, respectively.

"The amendments are aimed at further improving the transparency and dissemination of information of financials of listed companies in a timely manner as well as ensuring fair trading at the Bahrain Stock Exchange,"

said Mr. Ali Salman Thamer, Director, Capital Markets Supervision, at the CBB.

"The amendments are also aimed at enhancing investor confidence, which is critical for further developing a vibrant capital market in Bahrain."

The amended Disclosure Standards and Guidelines on Insiders will be part of the Capital Markets Rulebook, which is currently under development by the CBB. The Capital Markets Rulebook will comprise Volume 6 of the CBB Rulebook.

The new regulatory framework for capital markets will conform to international standards, to ensure that the financial market in Bahrain is fair, orderly and efficient.