Bahrain Central Bank Issues New Regulations Governing Operations of Crowdfunding Platforms – Regulation Bitcoin News

CBB has issued new rules that require crowdfunding platform operators, to be sure their products suit clients. These regulations will replace the 2017-issued guidelines.

Platform Operators Offer Segregation Of Client Money

A statement was issued by the Central Bank of Bahrain (CBB), stating that new guidelines were released by the Central Bank of Bahrain for crowdfunding platform owners. This is the first such publication since 2017. These new guidelines cover the principles that regulate the operation of crowdfunding platforms as well as rules that relate to disclosures and offers made by crowdfunding platforms.

The new regulations, which are covered under the Crowdfunding Platform Operators Module (Module CFP), also address the “segregation of client money from platform operators and other measures to ensure safe operation of the activity.” Further, the new regulations compel the platform operators “to ensure [the] suitability of the products” that are being offered to retail clients.

In her remarks following the announcement, the CBB’s director of the regulatory policy unit, Shireen Al Sayed, hailed the central bank’s move to improve the provision of financial services. Al Sayed also added:

The CBB is keen to revise the regulations for crowdfunding platform operators in order to ensure that they are in compliance with the economic recovery plan.

Al Sayed said that the new regulations were easy to comprehend and have minimal safeguards in place to make sure the crowdfunding platforms pose no risk to financial institutions.

Crowdfunding is an alternative financing route

Yasmeen Al Sharf (director of Fintech, innovation unit at CBB), is also quoted as suggesting that crowdfunding could be an alternative source of funding for startups.

“Fintech solutions have the potential to enhance capital flows to the economy commensurate with the growth and expansion plans of entrepreneurs through this new source of funding, thereby, helping to develop the businesses of these start-ups,” Al-Sharaf added.

CBB ends its statement with a declaration that crowdfunding is an innovation now being used by small- and medium-sized businesses, seed capital and startups that are looking for funding.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.