Rules and Regulations issued in Mauritius under the Financial Services Act 2007 and the Companies Act 2001

The Financial Services Commission (Commission) has issued the Financial Services (Investment Banking) (Amendment) Rules 2020, the Financial Services (Administrative Penalties) (Amendment) Rules 2020 and the Securities (Licensing) (Amendment) Rules 2020 in accordance with the powers granted to it under section 93 of the Financial Services Act 2007 (Act).

The Minister of Finance, Economic Planning and Development (Minister) has equally issued the Companies (Payment of Fees to Registrar) (Amendment) Regulations 2020 pursuant to sections 355 and 360 of the Companies Act, 2001.

Financial Services (Investment Banking) Rules 2016

A significant amendment is brought to the Financial Services (Investment Banking) Rules 2016 (Investment Banking Rules) through the introduction of new standards applicable to the stakeholders of a holder of an investment banking licence. Thus under the new Rule 7A of the Investment Banking Rules:

1. The majority of the shares of a holder of an investment banking licence shall be held by an entity or a group with at least one entity regulated in Mauritius or an equivalent jurisdiction to provide investment banking, asset management, investment advisory, and/or corporate finance services for at least 5 years.
2. A holder of an investment banking licence shall at all times ensure that it has a Chief Executive Officer with at least 15 years relevant experience in investment banking, asset management, investment advisory and/or corporate finance.
3. Where a holder of an investment banking licence issued before 31 March 2019 does not meet any requirements of the rule, it shall submit to the Commission a plan which will ensure that it will comply with the rule within a pre-determined timeframe approved by the Commission.
4. For the purposes of the rule, a Chief Executive Officer is a person responsible for the conduct of the business of the organisation under the immediate authority of the board of directors.

In the same breath, the Commission seeks to bring flexibility to the minimum stated unimpaired capital requirements applicable to the holder of an investment banking licence by amending Rule 8 of the Investment Banking Rules. Pursuant to Rule 8 of the Investment Banking Rules, a holder of an investment banking licence shall maintain a fully paid minimum stated unimpaired capital of at least 50 million rupees or such other amount as may be determined by the Commission. The amendments grant the flexibility to holders of investment banking licences issued before 31 March 2019 such that in the event they do not meet the requirements of Rule 8, such licensees shall submit a plan to the Commission which will ensure that they shall comply with the requirements of Rule 8 within a pre-determined timeframe approved by the Commission.

The Financial Services (Investment Banking) (Amendment) Rules 2020 shall be deemed to have come into operation on 19 August 2020.

Financial Services (Administrative Penalties) Rules 2013

The Financial Services (Administrative Penalties) Rules 2013 (Administrative Penalties Rules) provide for a list of administrative penalties levied on a licensee in relation to certain prescribed on-going obligations, including the obligation to prepare and submit audited financial statements and annual reports under, among others, the Act and its ensuing rules and regulations.

Rule 11 of the Investment Banking Rules requires a licensee to file an annual report with the Commission, within 90 days of the balance sheet date of the licensee. The Financial Services (Administrative Penalties) (Amendment) Rules 2020 introduces an administrative penalty of MUR 300 (US$ 10) for each business day of non-compliance with the obligation under Rule 11. Through such amendments, the Commission seeks to reinforce its additional administrative tool, in pursuance of its statutory requirements as a regulator, to ensure compliance with the statutory reporting requirements of a licensee.

The Financial Services (Administrative Penalties) (Amendment) Rules 2020 shall be deemed to have come into operation on 03 September 2020.

Securities (Licensing) Rules 2007

Pursuant to the Securities (Licensing) Rules 2007 (Licensing Rules), in order to be licensed as representatives of investment dealer and as an investment adviser, the applicant must satisfy the Commission of a ‘Relevant Qualification’ and this includes, inter alia, having a ‘degree in a relevant field’. The Licensing Rules defined ‘Relevant Qualification’ as ‘a Degree or Diploma from a University, as the Commission may consider appropriate’. ‘Relevant field’ was limited to ‘Accounting, Finance or Economics’.

The Securities (Licensing) (Amendment) Rules 2020 seeks to widen the scope of qualifications of an applicant as representatives of investment dealer and investment adviser, thus enabling a broader category of professionals to qualify for such licenses and further enabling the Commission consider qualifications other than a Degree or Diploma from a University. The definition of ‘Relevant Qualification’ is therefore revised as follows: ‘a Degree or Diploma from a University, or any other qualification as may be considered appropriate by the Commission’. The definition of ‘Relevant field’ has also been amended to include ‘any other field as may be considered appropriate by the Commission’ other than Accounting, Finance or Economics.

The Securities (Licensing) (Amendment) Rules 2020 shall be deemed to have come into operation on 03 September 2020.

Companies Act 2001

Pursuant to the Companies (Payment of Fees to Registrar) Regulations 2015, the fees payable to the Registrar of Companies for restoring a company on the register of the Registrar of Companies was MUR 15,000. In an attempt to make the system more accessible and cost effective, the Minister has issued the Companies (Payment of Fees to Registrar) (Amendment) Regulations 2020 to revise the fees payable to the Registrar of Companies for restoring a company back to the register to MUR 5,000.