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An overview of the financial services sector in Mauritius Presented by Charlene LOUIS-PLANCHE 10 October 2013


AGENDA 1. Regulation of Mauritius Financial Services Sector 2. Non-Bank financial regulation prior to 2001 3. About Financial Services Commission • Legal and Regulatory Framework

• Statutory Objectives of FSC • Role of FSC • FSC – an internationally recognised supervisor • Organisation Chart

4. Sector-wise overview 5. Opportunities and Challenges for Mauritius IFC 3


Regulation of Mauritius Financial Services Sector Financial Services Commission (FSC) • • • • •

Global Business (GB) Capital Markets Insurance Pensions Other NBFIs • Banking Services

Bank of Mauritius (BOM) 4


Non-bank Financial Regulation prior to 2001 Distinct & separate specialist regulatory agencies:

◦ Insurance business regulated by Insurance Division of the Ministry of Finance

◦ Securities market regulated by the Stock Exchange Commission (SEC) since 1989. The Stock Exchange of Mauritius (SEM) is operated & managed by a private company. ◦ The non-bank offshore business regulated by the Mauritius Offshore Business Activities Authority since 1992

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The Financial Services Commission

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About Financial Services Commission Who we are Set up in 2001 as an integrated regulator for financial services other than banking and global business

What we do • Protect

- the integrity and stability of the non-bank financial services sector - the interest of investors and consumers • Regulatory activities to ensure integrity and financial soundness of licensees • Sustain development of the financial services sector

Vision “To be an internationally recognised Financial Supervisor committed to the sustained development of Mauritius as a sound and competitive Financial Services Centre” 7


Legal & Regulatory Framework • Mixed legal system: civil and common law Right of appeal to Judicial Committee of the Privy Council Confidentiality (with transparency) for Global Business

Legislation • Financial Services Act • Insurance Act • Securities Act • Private Pension Schemes Act

Compliance with International norms and standards • IOSCO principles • IAIS principles • IOPS principles • OECD Principles •

FATF recommendations (AML-CFT)

• Peer reviews (ROSC) • FSAP assessments

• Companies Act • Protected Cell Companies Act • Limited Partnership Act • Foundations Act • Financial Reporting Act

 A modern legal and regulatory framework for the financial services industry  The right balance between regulation and business development 8


Statutory Objectives of FSC Our Statutory objectives include inter alia:

ďƒ˜ To ensure the orderly administration of the financial services and global business activities; ďƒ˜ To ensure the sound conduct of business in the financial services sector and in the global business sector; ďƒ˜ To elaborate policies which are directed to ensure fairness, efficiency and transparency of financial and capital markets in Mauritius;


Statutory Objectives of FSC (cont…)  To study new avenues for development in the financial services sector, to respond to new challenges and to take full advantage of new opportunities for achieving economic sustainability and job creation;

 To ensure, in collaboration with the Bank of Mauritius the soundness and stability of the financial system in Mauritius;

 To work out objectives, policies and priorities for the development of the financial services sector and global business and to make recommendations to the Minister.


Role of FSC • License, regulate, monitor and supervise the conduct of business activities in the non-banking financial services sector and of global business • Identify and take measures to prevent and eliminate investment business abuse

• Take measures for the better protection of consumers of financial services • Establish norms and standards in order to preserve and maintain the good repute of Mauritius in the financial services sector • Study new avenues for development in the financial services sector, to respond to new challenges and to take full advantage of new opportunities for achieving economic sustainability and job creation.


FSC: An internationally recognised Financial Supervisor The FSC is a member: International • International Organisation for Securities Commissions (IOSCO) • International Association of Insurance Supervisors (IAIS) • International Organisation of Pension Supervisors (IOPS)

Regional • SADC - Committee for Securities and Non-Bank Financial Authorities (CISNA) • Africa Middle East Regional Committee (AMERC) • Financial Services Board-Regional Consultative Committee (FSB-RCG)

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Financial Services Commission

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Sector Overview

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Insurance Under the Insurance Act, the FSC grants 8 types of licences: 1. 2. 3. 4.

Long term Insurance General Insurance Business External Insurer Professional Reinsurer

5. 6. 7. 8.

Insurance Salespersons Insurance Agent (Company) Insurance Brokers Insurance Agent (Individual)

12 general & 7 long term Insurance Companies, 10 reinsurers

Represent the insurance service providers or intermediaries. Over 2000 were licensed (Brokers, Agents, Salespersons)

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Capital Market Licensees Securities Exchanges

Intermediaries

(i) SEM (Stock Exchange of Mauritius Ltd) - Operating 2 markets - Official Market & DEM) (i) GBOT – Multi-class Asset Exchange – operating 3 segments (currency & commodity, equity)

(i)

Clearing & Depository Facilities (i) CDS – a subsidiary of SEM for clearing & settlement of trade (ii) GBOT also has a licence under section 10 of the SE Act 2005.

Investment Dealers & representatives

CIS & Functionaries (i) (ii) (iii) (iv) (v)

Under SE Act 2005 sec 97 CIS Managers CIS Administrators Custodians Investment Advisers & Representatives

Reporting Issuers (i)

Under SE Act 2005 section 86

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Specialised finance institutions and Other non-banking financial institutions 15 different types of licenses are catered for under section 14 of the FSA. • • • • • • • • • •

Assets management Distribution of financial products Pension fund administration Pension scheme management Registrar and transfer agents Treasury management Custodian (Non-CIS) Credit finance, Factoring Leasing

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 

Actuarial services Payment intermediary services Credit rating agencies/rating agencies Representative office Other financial business activity

However, this list is not exhaustive and the FSC Rules may provide for other financial business activities.

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Challenges for Mauritius IFC

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Mauritius International Financial Centre Expertise in Global Business - Pool of Qualified Professionals

Sound Regulatory Framework and Diversified products

Competitive Edge

Ethics and Corporate Governance Competitive Operation Cost & Business Friendly Environment Communication Network & High Internet Connectivity

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Financial Services Commission Mauritius

International • • • •

International Standards – IOSCO, IAIS, IOPS OECD, G20 decisions - FSB International Taxation Reforms Maintaining our Competitive Edge

Regional • • •

Emerging IFCs Competitive products Harmonisation of international norms and standards

Within Mauritius • • • • •

Independence of FSC, Enforcement Diversified and Developed, Stability, Competitive – Effective and Efficient Competencies - Expertise = Knowledge, skills Market = Global Business => Substance Conduct = Confidence, Trust, Reliability


Any Questions

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THANK YOU FOR YOUR KIND ATTENTION

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54 Ebene Cybercity Mauritius Tel: (230) 403 7000 Fax: (230) 403 7172

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Email: fscmauritius@intnet.mu www.fscmauritius.org

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