Bahrain: Crowdfunding Regulations Issued

Bahrain: Decision on Reporting Information and Measures Against Frozen Funds Issued News developments

Bahrain: Crowdfunding Regulations Issued

The National, 1 May 2022: The Central Bank of Bahrain has set new rules governing crowdfunding-based activities.

The move follows a comprehensive review of existing regulations and contains rules on both equity and financing-based crowdfunding, according to a report by Bahrain News Agency.

The new regulations include principles governing the conduct of operations by the platform, rules on platform offers and disclosures. Methods for avoiding conflicts of interest are also covered as are segregating client money from platform operators to ensure safe operation of the activity.

Crowdfunding is seen by the authorities in Bahrain as potentially providing new alternative sources of funding for new businesses and start-ups and it is hoped it will serve as a catalyst for the growth of these types of businesses. The new regulations are principles-based, simple, easily understood and contain the minimum safeguards required to ensure crowdfunding platforms do not pose excessive risk to the financial sector.

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