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Mauritian National Assembly Adopts New Financial Regulation

by Lorys Charalambous, Tax-News.com, Cyprus

28 March 2005

The National Assembly of Mauritius last week adopted the Financial Services Development (Amendment) Bill which considerably strengthens the powers of the Financial Services Commission.

The bill is partly a response to a 900m rupee fraud which took place at the Mauritius Commercial Bank, and has rocked the island's banking sector over the past two years.

Minister of Industry and Medium Enterprises, Financial Services and Corporate Affairs, Mr K C Khushiram says that the bill will:

  • amend the existing power of the Financial Services Commission to enable it to administer administrative penalties;
  • provide for the establishment of an Enforcement Committee within the internal structure of the Financial Services Commission, with a view to provide for an internal disciplinary mechanism to separate the investigatory and enforcement functions of the Commission;
  • provide for the establishment of a Financial Services Review Panel to review the full merits of a decision made by the Financial Services Commission or a self-regulatory organisation; and
  • enable the Financial Services Commission to institute criminal proceedings, subject to the consent of the Director of Public Prosecutions, against any person in respect of any offence under the various enactments falling under the administration of the Financial Services Commission.

The bill also forms part of a plan to merge the island's banking and non-bank financial sectors from a regulatory perspective. Criticized during hearings on the new bill for the length of time this process was taking, Prime Minister Paul Berenger said: "A lot of things have happened in the banking sector and non banking financial sector. No doubt what has happened in the banking sector has slowed things down." However, he reaffirmed the government's determination to continue on the same track, and said he wanted the Mauritian regulatory regime to be seen as an international model.

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