Mutual fund asset values up 50pc says CBB

Bahrain-origin investments in mutual funds have seen a 49.71 per cent rise in net asset value (NAV) to $10.122 billion as of the end-June 2021, when compared with $6.761bn as of end-2020, shows data revealed by the Central Bank of Bahrain (CBB).

According to the CBB website, of the total NAV, $5.786 billion is invested in locally-incorporated funds, and $1.100bn in Sharia-compliant funds.

As of end-October 2021, the number of mutual funds stood at 1701, of which 74 funds were Bahrain domiciled, compared to 2010 funds as of end-October 2020.

The number of Sharia compliant funds stood at 90 as of end-October 2021.

Shireen Al Sayed, director of regulatory policy unit at the CBB, told BNA yesterday that the regulator is currently studying a variety of financing tools based on blockchain technology that facilitates access to venture capital and other financial services.

The CBB continues to develop and update the regulatory framework in order to keep pace with changes in global markets, and to address risks associated with new technologies and business models that have an impact on investment companies and the money management industry, she added.

In September, the regulator announced the introduction of a new licence category of investment firms under the CBB Rulebook Volume 4 – Investment Business.

The new licence category caters to the business models of specialist fund managers who operate/manage/market collective investment undertakings (CIU) which means funds targeted at accredited investors - those with a net worth of $1 million and above and not offered to retail investors.

Examples of such funds include private equity funds, hedge funds, structured funds, real estate funds, venture capital funds and other alternative investment funds.

The CBB recognises the unique risks posed by such fund managers given their business models and sophisticated investor base.

The new regulations maintain high standards of business conduct, include measures to safeguard client money/assets and require disclosure standards to investors in line with international best practices.


“The introduction of the category 4 investment firm licence and related regulations will set a conducive environment for further growth of the asset management industry within the appropriate regulatory framework,” Ms Al Sayed said.

The first overseas mutual funds started being marketed in Bahrain during the 1980s, and the first Bahrain domiciled scheme was launched in 1984.

The first collective investments schemes rules were issued by the CBB in 1992 and were subsequently revamped in June 2007, when the Collective Investment Undertakings (CIU) Module within CBB Rulebook Volume 6 was issued.

The rules were further revamped in Volume 7 of CBB Rulebook, providing comprehensive rules and regulations pertaining to the authorisation/registration and supervision of mutual funds domiciled and/or offered for marketing in Bahrain.




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