CBB Introduces Funds Passporting Regime for Cross-Border Investment Fund Registration

The Central Bank of Bahrain has implemented a new Funds Passporting Regime, enabling investment funds licensed in Bahrain to be registered and distributed across GCC and other jurisdictions with streamlined regulatory processes.

The regime reduces the duplication of regulatory approvals that fund managers currently face when seeking to distribute investment products across multiple Gulf markets. Under the new framework, a fund approved in Bahrain can access other participating jurisdictions through a simplified registration process rather than undergoing full licensing in each market.

The initiative is designed to attract international asset managers to Bahrain by offering access to the broader Gulf investment market through a single regulatory gateway. By positioning Bahrain as an entry point for regional fund distribution, the CBB aims to strengthen the country's role as a premier hub for wealth management and capital markets in the Middle East.

Funds passporting has been a longstanding feature of developed financial markets, most notably the EU's UCITS framework, which allows investment funds authorised in one member state to be marketed across the entire European Economic Area. The CBB's regime brings a similar concept to the Gulf, adapted to the regulatory structures and market dynamics of the GCC.

The framework is expected to benefit both Bahrain's financial services sector and the broader Gulf investment market. For Bahrain, it creates a regulatory advantage that differentiates its funds industry from competing centres. For investors across the Gulf, it promises greater access to a wider range of professionally managed investment products.

The regime complements Bahrain's other financial sector innovations, including its open banking framework and digital payment mandates.