The roll-out of this market feature within the capital market is expected to attract significant international investment interest as well as form a stepping stone towards the achievements of an emerging market status.
Monday 25, March 2019 BY KUDAKWASHE MUZORIWA
The Central Bank of Bahrain (CBB) has issued resolution 23/2019 for issuance of regulations in respect of short selling and giving securities on loan, which stipulates that the central bank shall specify the types of securities, which may be traded by loan and short sale, the terms and procedures of such transactions and the rights and obligations of all concerned parties, according to local newswire, Bahrain News Agency.
In a statement, the regulator stated that this resolution introduces short selling and giving securities on loan into the Kingdom’s capital markets ecosystem.
Abeer Al-Saad, Director of the Capital Markets Supervision Directorate at the CBB, said, “The objective of this resolution is to improve the efficiency of the capital markets in the Kingdom by promoting new investment and trading strategies through diversification of investment instruments which shall result in better price discovery, enhanced liquidity and attracting new sophisticated investors.”
"The issuance of this resolution is a key milestone in the development of the capital markets, which is expected to enhance market liquidity,” added Shaikh Khalifa bin Ibrahim Al Khalifa, the CEO of Bahrain Bourse.