The FSC says that in drafting the Securities Act 2005, the approach was to include only high-level principles in the legislation and to include the finer details (that are more subject to change) in Regulations and Rules that will supplement the legislation. Accordingly, the Securities Act 2005 (which was enacted in March 2005) provides for the creation of such subsidiary legislation which is in the course of preparation.

At this point, the draft Securities (Collective investment schemes and closed end funds) Regulations and the draft Securities (Licensing, prudential and conduct of business) Rules have reached an advanced stage. Before proceeding further, the Commission is releasing the documents for the purposes of obtaining comments and suggestions from stakeholders and the public in general. This is in line with the Commission’s policy to make its rule-making process as transparent as possible.

It should not be assumed that the proposals or ideas expressed in these draft documents reflect the definitive view of the Commission who may vary the draft proposals in light of its own reflections and of the view expressed by licensees, stakeholders and other interested parties.

The FSC says that the main purpose of the Securities Act 2005 (“the Act”) is to ensure a fair, efficient and transparent securities markets and most importantly, to strike an appropriate balance between the protection of investors and the interests of the securities market. The Act, which replaces the Stock Exchange Act 1988, draws on modern legislation in analogous jurisdictions and underpins the Government’s intention to expand financial services in Mauritius while assuring appropriate regulatory and supervisory standards, recognising the on-going development of the Mauritian financial sector and its continuing integration into the world economy.

The main objectives of Act are to:

• promote the confident and informed participation of investors and consumers in, and the efficiency of, securities markets in Mauritius;
• improve the protection of investors in Mauritius from unfair, improper and fraudulent practices in relation to securities;
• foster fair, efficient, transparent and informed markets for securities in Mauritius;
• act in co-operation with other agencies in Mauritius and elsewhere, to reduce systemic risk in the Mauritius financial sector;
• regulate the disclosure of information by persons issuing securities and by reporting issuers to securities holders and to the public;
• monitor and regulate the operation of securities exchanges and the activities of persons providing depository, clearing and settlement services and trading systems for securities;
• suppress and prevent financial crimes and illegal practices;
• cooperate and collaborate with domestic and international organisations, law enforcement, supervisory and regulatory bodies, and
• carry out research and collect, compile, publish and disseminate data and information on the securities industry.

The FSC has not yet announced the dates on which various sections of the Act will come into force.