Mauritius FSC Releases 2003 Annual Report

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

10 March 2004

The Mauritius Financial Services Commission (FSC) has launched its 2003 Annual Report, it emerged last week.

Unveiled at the opening of an international conference on non-bank financial institutions jointly organised by the FSC and the International Monetary Fund (IMF), much of the report focuses on regulatory initiatives designed to improve licensing, surveillance and enforcement for regulated entities in the jurisdiction.

Stressing that the FSC will continue to ensure that regulation of the financial services sector is both "sensitive and effective", the report outlined completed and ongoing regulatory initiatives in several areas. These included:

• Significant changes which are being brought to the insurance and securities legislations through the introduction of new securities and insurance bills that will enhance regulatory effectiveness without imposing any undue constraints on the industry. The new Insurance Act to be implemented shortly will focus on specific regulatory issues relating to capital adequacy, solvency, corporate governance and early warning systems and protections of policy holders.
• The reinforcement of AML/CFT regulations in order to preserve the integrity of Mauritius as a financial center of clean repute. New regulations have been issued under the Financial Intelligence and Anti-Money Laundering Act 2002 that require the establishment of adequate internal controls and reporting procedures. As part of its mandate to suppress financial crimes, the Commission has issued three Codes intended for investment businesses which aim at combating such practices. The new Codes are minima prescriptions and cover customer identification, reporting of suspicious transactions and the need for a Money Laundering Reporting Officer.
• Awareness raising on the implications of sound corporate governance legislations through constant dialogue with the industry. The FSC has promoted, in various forum and seminars, the necessity for firms to adopt and implement sound management principles and good governance. The move was broadly welcomed by the industry and a Corporate Governance Code has been published.

Beyond the changes introduced through legislation itself, the Annual Report revealed that the Commission is putting in place a more proactive mode of regulation that stresses compliance with prudential rules rather than drastic end of line enforcement actions. A new risk assessment framework is being put into practice that seeks to assess individual firm’s financial viability and risk profile.

The Financial Services Commission concluded by explaining that:

"The Commission’s agenda for change will be a continuing one evolving with the demands of the industry. Some changes have already been made but others will take time to have full effect."

"The Commission in its second year of existence looks forward with confidence to the future. Expectations are that the industry will appreciate the full implications of the new regime and the benefit it will bring to all."

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