Bahrain Bourse (BHB), an exchange authorized by the Central Bank of Bahrain, has announced the initiation of its Comprehensive Trading Incentive Scheme, set to take effect on February 2.
This initiative is designed to boost market participation, enhance liquidity, and promote active involvement among brokers, market makers, and liquidity providers through inventive incentive strategies. The scheme is a central goal of the Financial Services Sector Development Strategy (2022-2026) and aligns with the Listing Incentives Programme recently introduced by Bahrain Bourse in 2024.
Benefits for market participants
The Trading Incentives Scheme aims to offer a variety of customized benefits to assist market participants and motivate market makers, liquidity providers, and brokers to elevate their trading volumes in accordance with the business rules of Bahrain Bourse and cleared by Bahrain Clear, thereby fostering increased liquidity in the market.
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Incentives for newly onboarded members
Newly onboarded members who provide online connectivity will enjoy a 20 percent reduction in Membership Registration Fees and a complete waiver of Membership Annual Subscription Fees for the first two years for one connection. Furthermore, existing members trading through online connectivity will receive tiered rebates based on their annual trading volume. Moreover, members achieving an annual trading volume exceeding BHD75 million will qualify for a 10 percent rebate on commissions, which increases to a 20 percent rebate for annual trading volumes surpassing BHD140 million, and reaches a 30 percent rebate for those exceeding BHD220 million. These rebates are limited to BHD20,000 per year and will be calculated based on the total commissions paid to Bahrain Bourse.
Rebate structure for market makers
Additionally, market makers and liquidity providers will benefit from a distinctive rebate structure linked to their order presence duration in the market. Those maintaining an order presence of 60 percent to 80 percent for each security will receive a 50 percent rebate on commissions, while those with an order presence of 80 percent or more will qualify for a 100 percent rebate on commissions. Rebates for market makers and liquidity providers will also be calculated on an annual basis, based on total commissions paid to Bahrain Bourse.
Commitment to market efficiency
Abdulla Mohamed Janahi, senior director of Trading Operations at Bahrain Bourse, stated: “The Comprehensive Trading Incentive Scheme is a significant step in our ongoing efforts to enhance market efficiency and encourage active participation across all market segments. By introducing these targeted incentives, we aim to create a dynamic and inclusive capital market environment, in line with Bahrain’s Financial Services Sector Development Strategy (2022-2026). By incentivising greater market engagement, Bahrain Bourse aims to deepen market liquidity, encourage active trading, and bolster the overall capital market ecosystem in the Kingdom of Bahrain.”
