BMA's Governor strengthens Bahrain's position in the global asset management industry

The Governor, H.E. Shaikh Ahmed Bin Mohammed Al-Khalifa, said: "The BMA has already played a significant part in the 40 per cent rise in locally incorporated funds that we have seen over the past year, to some 42 funds at the last count, collectively representing $800m in investments.

"Overall, we have continued to see a steady rise in the number of funds registered in Bahrain and the volume of investments that they represent: as at end-December, these stood at just under 1,400 funds and just over $4bn in investments, the latter representing nearly a 30 per cent increase year on year."

Since last year, the BMA has streamlined the application process for the registration of collective investment schemes, including the provision of application forms on-line. The BMA has also developed, in conjunction with the Ministry of Commerce, a more appropriate corporate structure for investment funds wishing to incorporate locally. Thirdly, to reduce applicants' administration and waiting-time, the BMA is to act as a 'one-stop shop', providing both regulatory approval and commercial company registration.

Looking ahead to 2004, the Governor, Shaikh Ahmed, said that the BMA plans to finalise and implement a significant re-organisation of its current licensing framework. The new framework will provide for the development of non-bank licenses in the area of investment services, allowing more appropriate licensing conditions and on-going regulatory requirements to be applied to activities such as asset management and custodian services.

The Governor, Shaikh Ahmed, added: "Apart from the strong regulatory benefits of a more tailored licensing structure, these changes will prove attractive to firms wishing to establish a presence here in Bahrain, but who have been put off by the onerous requirements of a banking-style regime."

In order to build on the success to date in developing a highly professional and well regualted environment for the asset management industry, the BMA is further enhancing the transparency of its regulatory requirements through the following four initiatives this year:

1. A series of industry rulebooks to contain regulatory requirements by subject matter.
2. Sectoral rulebooks for investment services firms
3. New regulations on hedge funds
4. The "professional investors' scheme" for high net worth individuals allowing a lighter regime of consumer safeguards for sophisticated investors.

The Governor, Shaikh Ahmed, concluded: "The asset management industry is likely to see significant growth in the Middle East region over the medium-term. The fundamental socio-economic changes now taking place within the Gulf region will lead to a much greater emphasis on private sector involvement in the provision of pensions, personal savings and health care. These are all key drivers for the expected future growth in the insurance industry in the region, and a take-off in that industry will undoubtedly create demand for asset management services."