The Bahrain Stock Exchange (BSE) was established by government decree in 1987 but it did not officially commence operations until June 1989 with 29 Bahraini shareholding companies listed. The BSE has grown to become a leading stock exchange in the region.
In 1999, the BSE opened up to foreign investors, allowing Gulf Cooperation Council (GCC) investors the opportunity to own up to 100% of a Bahraini company and for non-GCC investors, the opportunity to own up to 49%. In addition, foreign brokerage firms were allowed to operate for the first time in 2003. The Central Bank of Bahrain (formerly Bahrain Monetary Agency) is the authorized entity to regulate the exchange through the Capital Markets Supervision (CMS) division.
In 2010, Bahrain Bourse (BHB) was established as a shareholding company to replace the Bahrain Stock Exchange.
The Bahrain Financial Exchange (BFX) is a pioneering international financial exchange based in the Kingdom of Bahrain and internationally accessible to trade cash, derivatives, structured products and Shariah-compliant financial instruments. The BFX has set up the BFX Clearing and Depository Corporation (BCDC) to clear and settle the financial instruments traded by the its members. The BFX and the BCDC are licensed and regulated by the Central Bank of Bahrain (CBB).
The CBB granted the BFX final approval on October 18, 2010.