The Central Bank of Bahrain (CBB) has issued a new regulatory framework to govern the collective investment undertakings (CIU) industry.
The CBB’s CIU regulatory framework provides for the authorisation of two types of CIU:
- Retail CIUs, which may be sold to anyone but are subject to various requirements aimed at investor protection.
- Expert CIUs, which are subject to a minimum US$10,000 investment rule, and may only be sold to expert investors. Expert CIU are also regulated, but may fully invest in a wider range of assets (including real estate and commodities), and are subject to fewer risk concentration requirements.
A third category, ‘Exempt CIU’, will be subject only to certain requirements since these may only be sold to a restricted investor base. The exempt CIU rules will allow hedge funds and other higher risk alternative investment vehicles to be legally domiciled and/or sold in Bahrain.
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