STANDARD CONDITIONS AND LICENSING CRITERIA FOR PRIVATE BANKING

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					      STANDARD CONDITIONS AND LICENSING CRITERIA
                         FOR
               PRIVATE BANKING LICENSE


A Private Bank may carry out banking activities as per the list of activities
stated under “Regulated Private Banking Activities” below, to private
individuals that have at their disposal significant financial resources. The
term “private” refers to the customer service being rendered on a more
personal basis than in mass-market retail banking, usually via dedicated
bank relationship managers.

Private Banks may undertake transactions in U.S. Dollars and in any other
currency, with “Accredited Investors”. For these purposes, “Accredited
Investor” is defined as: Individuals who have a minimum net worth (or joint
net worth with their spouse) of US$1,000,000, excluding the person’s
principal place of residence. Companies, partnerships, trusts or other
commercial undertakings, which have financial assets available for
investment of not less than US$1,000,000; or governments, supranational
organizations, central banks or other national monetary authorities, and state
organizations that routinely invest in financial instruments (such as state
pension funds). To open an account, the Private Bank should not accept an
amount less than US$500,000 and the customer should retain such an
amount for his/her account at all time.

An institution licensed as Private Bank can provide various services such as
investment and advisory services, wealth management, financing & banking
services, inheritance and tax planning for their clients in accordance with the
rules of the CBB from time to time.

Regulated Private Banking Activities:

Regulated Private Banking services are any of the following activities,
carried on by way of business:

   1. Investment Services:
            Investment Advisory
            Discretionary & non discretionary portfolio management




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   2. Wealth Management & Planning:
           Fiduciary Services
           Assets allocation

   3. Financing & Banking:
            Accepting Deposits (subject to the minimum amount required
            to open an account)
            Granting Loans/or Finance to existing account holders


   4. Specialist Advisory:
            Corporate Finance Advisory
            Wealth and Tax Advisory


Licensing Conditions:

Condition 1: Legal Status

A Private Banking licensee must be a branch of an oversees bank
incorporated under the laws of the jurisdiction where it is authorized to
conduct private banking.

In deciding whether to grant the applicant a Private Banking license, the
CBB will pay close regard to its activities elsewhere and how these activities
are regulated. CBB will only accept applications from banks regulated by a
jurisdiction substantially compliant with Basel Core Principles and FATF 49
Recommendations.

A Private Banking licensee (conventional or Islamic) will be subject to all
wholesale banks rules & regulations in Rulebook Volumes 1 & 2
respectively, unless specified in this document.

Condition 2: Mind and Management

Private Banking licensees must maintain a local management presence and
premises in the Kingdom appropriate to the nature and scale of their
activities.




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Condition 3: Controllers

When considering applications, the CBB has regard to the reputation and
financial standing of the group as a whole. Where relevant, the CBB will
also take into account the extent and quality of supervision applied to
overseas members of the group and take into account any information
provided by other supervisors in relation to any member of the group. The
controllers of Private Banking licensees must meet the requirement stated
under the controller’s regulation in the General Requirements Module (GR).


Condition 4: Board and Employees

Those appointed to carry out controlled functions must satisfy the CBB’s
Approved Persons Requirements in HC Module.

The Private Banking licensee's staff, taken together, must collectively
provide a sufficient range of skills and experience to manage the affairs of
the licensee in a sound and prudent manner. Private Banking licensees must
ensure their employees meet any training and competency requirements
specified by the CBB from time to time.


Condition 5: Financial Resources

Capital Adequacy:

Applicants are required to provide written confirmation (e.g. a letter of
comfort) from their parent company that the latter will provide sufficient
financial support to the branch to enable it to meet its obligations as and
when they fall due. Applicants must also demonstrate that the bank as a
whole is adequately resourced for the amount of risks underwritten and that
the bank and its group meet capital adequacy standards applied by its home
supervisor.




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Liquidity:

Private Banking licensees must maintain sufficient liquid assets to meet their
obligations as they fall due in the normal course of their business. Private
Banking licensees must meet the minimum CBB licensing requirements
stated under Liquidity Requirement Module (LR)

Condition 6: Systems and Controls

Private Banking licensees must maintain systems and controls that are, in the
opinion of the CBB, adequate for the scale and complexity of their activities.
These systems and controls must meet the minimum requirements contained
in Modules HC and OM.

Private Banking licensees must maintain systems and controls that are, in the
opinion of the CBB, adequate to limit licensee’s vulnerability to financial
crime. These systems and controls must meet the minimum requirements
contained in Module FC, as specified for the category of license held.

Applicants will be required to demonstrate in their business plan (together
with any supporting documentation) what risks their business would be
subject to and how they would manage those risks. Applicants may be asked
to provide an independent assessment of the appropriateness of their systems
and controls to the CBB, as part of the license approval process.

Condition 7: External Auditors

Private Banking licensees must appoint external auditors, subject to the
CBB’s prior written approval. Private Bank licensees must adhere to the
requirements contained in Module AU (Auditors and Accounting Standards
Module) with respect to the appointment of auditors.

Applicants must submit details of their proposed external auditors to the
CBB as part of their license application.


Condition 8: Other Requirements



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Books and Records

Private Banking licensees must maintain comprehensive books of accounts
and other records, and satisfy the record keeping requirements contained in
Module OM. Books of accounts must be prepared in accordance with IAS.
Audited accounts must be submitted to the CBB within 3 months of the
licensee's financial year-end.


Provision of Information

Private Banking licensees must act in an open and cooperative manner with
the CBB. Private banking licensees must meet the regulatory reporting and
public disclosure requirements contained in Modules BR and PD
respectively.

General Conduct

Private Banking licensees must conduct their activities in a professional and
orderly manner, in keeping with good market practice. Private Banking
licensees must comply with the principles of business contained in Module
PB, as well as the general standards on business conduct and treatment of
customers contained in Modules BC and CM respectively.

License fees

Private Banking licensees must pay a license fee based on 0.25% of the
operating cost base, subject to a minimum amount of BD10,000 and a
maximum amount of BD35,000.

Additional Conditions

Private Banking licensees must comply with any other specific requirements
or restrictions imposed by the CBB on the scope of their license from time to
time.

Private Banking licensees are subject to the provisions of the CBB Law
2006. These include the right of the CBB to impose such terms and
conditions, as it may deem necessary when issuing a license. Thus, when
granting a license, the CBB specifies the regulated banking services that the


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licensee may undertake. Licensees must respect the scope of their license.
Chapter LR-3.2 sets out the process for varying the scope of an
authorisation, should a licensee wish to undertake new activities.

In addition, the CBB may impose additional restrictions or requirements,
beyond those already specified in Rulebook Volumes’ 1 and 2 for
Conventional wholesale banks and Islamic wholesale banks respectively, to
address specific risks. For instance, a license may be granted subject to strict
limitations on intra-group transactions.




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