CBB licence for BNP Parabas to establish new fund management firm

BNP Paribas Asset Management B.S.C. (under formation) will be a wholly owned subsidiary of Europe-based BNP Paribas Asset Management (BNPP AM).

The CBB has authorized BNP Paribas Asset Management B.S.C. as an Investment Business Firm (Category 2). The new firm will manage a number of funds to be launched by BNP Paribas Asset Management.

In addition, during the first quarter of this year, the CBB granted a licence to allow the Group to establish a second wholesale banking operation in Bahrain. BNP Paribas 3U is aimed at expanding the Group's banking business in the Middle East & North Africa (MENA) region.

The most recent licence for BNP Paribas Asset Management B.S.C. is the fifth to be granted by the CBB to the BNP Paribas Group, the Euro Zone's largest banking group and the 5th largest in the world.

The Group has been present in Bahrain since 1975. Currently employing over 260 employees in Bahrain, the Group's activities span the bank's three core business lines of Corporate and Investment Banking; International Retail Services; and Asset Management and Services.

'The CBB is delighted to support the expansion of BNP Paribas operations from Bahrain,' said Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy, at the CBB.

'The presence of sterling institutions, such as BNP Paribas, adds considerable value to Bahrain as an international financial centre.'

Mr. Jean-Christophe Durand, Regional Director of BNP Paribas-GCC said:

'We are very pleased with this new license as it reflects the confidence of BNP Paribas in Bahrain. We have specifically chosen Bahrain as a regional hub for BNP Paribas in the Gulf.'

The proposed establishment of BNP Paribas Asset Management B.S.C. is indicative of the Kingdom's growing attraction as a jurisdiction for fund management and fund administration services, said Mr. Al Bassam.

In mid-2007, the CBB introduced an upgraded regulatory framework to govern the industry for collective investment undertakings (CIUs). The new framework includes Bahrain's first-ever rules allowing CIUs targeting professional investors. Under a newly-created category, 'Exempt CIU', the CBB regulatory framework allow hedge funds and other higher risk alternative investment vehicles to be legally domiciled and/or sold in Bahrain.

Exempt CIU are subject only to certain requirements since these may only be sold to a restricted investor base (those able to make a minimum investment of US$100,000, and with at least US$1 million in financial assets, and subject to verification by the institution selling the product that the investor fully understands the risks involved).

With the new licence from the CBB, BNP Paribas Asset Management B.S.C. will be able to establish and manage funds across all categories allowed by the CBB, Mr. Al Bassam pointed out.

The CBB is seeing growing interest from financial institutions to establish funds investing in the region, many of which are being registered in Bahrain.