Wednesday, September 1, 2010

Bahraini Regulatory Quiz: When Do Bahraini Banks Have to Publish Their 30 June Basel II Pillar 3 Disclosures?

As if there weren't enough excitement here at Suq Al Mal with compelling analyses of zakat payments, magical provisions, we're going to have a contest to liven things up a bit more.

My understanding was that locally incorporated banks in the Kingdom of Bahrain are required to publish their Basel II Pillar 3 disclosures concurrent with their 30 June financials.

But one firm noted for its unwavering verbal commitment to disclosure and transparency has yet to do so.  That obviously means that my understanding is wrong.

Hence, this competition.  

The first one to post the chapter and verse from the CBB's Rulebook will receive the grand prize --  a slightly worn "proven business model" formerly the property of a self-proclaimed world class "Islamic" investment bank.  Early responders may be eligible for a bonus prize - a half baked business plan for a US$4 billion energy city/financial and day care center.

Multiple entries are permitted.

2 comments:

SellyDan said...

Answer attempt: Published online within 45 days of end-of-quarter; submitted to the CBB within 60 days. (Though there maybe some confusion between "quarterly" and "half-yearly"...)



BR-3.1.6: All banks, referred to under Paragraph BR-3.1.1 [i.e. all locally incorporated banks licensed by the Central Bank in the Kingdom of Bahrain], should submit their reviewed (unaudited) quarterly financial statements to the Central Bank within 60 days from the statement date.

BR-3.1.7: The statements mentioned under Paragraph BR-3.1.6 should be in compliance with the requirements set out under Section PD-3.1.

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PD-3.1.4: Extracts from the reviewed quarterly financial statements (including at least the balance sheet, income statement, statement of cash flows and a statement of changes in shareholders' equity as required by AAOIFI Standards) must be published in one Arabic and one English daily newspaper widely available in Bahrain and on the bank's website within forty-five days of the end of the quarter to which such statements relate.


PD-3.1.6: In addition to the requirements of paragraphs PD-3.1.1 to PD-3.1.5 above, the following requirements apply to the Semi-Annual financial statements posted on banks' websites. Banks must make all the quantitative disclosures required by section PD-1.3 in the half-yearly financial statements on their website.....

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PD-1.3.2: The disclosure requirements listed in Paragraphs PD-1.3.4 to PD-1.3.44 below follow the requirements of Basel 2 Pillar 3 and the IFSB and are in addition to or in some cases, serve to clarify the disclosure requirements of AAOIFI and/or IFRS as appropriate.

Abu 'Arqala said...

SD

Congratulations, you're the winner! And what a contest it was.

Here's the proven business plan.

(1) First, buy something for X*. (If you can buy it from yourself or your business associates, there is an opportunity for additional profit as you can achieve a profit both on the acquisition and eventual sale to investors).
(2) Second, mark it up to 140% X. Where possible include ongoing management and other fees for your post sale 'stewardship" of the project.
(3) Third, launch an aggressive marketing campaign promising dramatic returns. Make sure your brochures and literature are first rate in terms of appearance. And your offices are glitzy. Launch a project specific website with lots of pictures of what will be built. Or at least what is promised to be built. Be sure to secure and ensure ongoing favorable press coverage.
(4) Fourth, in the initial sale, sell off as much as possible to investors. Extra points are given later if you sell off all or a substantial piece of your remaining (post sale) initial position. Risk management is after all a smart move, particularly since you know the project!
(5) Fifth, begin process again hopefully before the earlier project crashes.

*Where required, obtain needed support from local authorities through granting a "Bob Hassan" equity interest.