The Ministry of Industry, Financial Services and Corporate Affairs releases working documents on financial legislation for public consultation
The Ministry of Industry, Financial Services and Corporate Affairs has on 11th June 2004 issued a Communiqué inviting the public to provide comments on the following working documents:
§ The Securities (Collective Investment Schemes) Regulations
§ The Investment Limited Partnership Bill
§ Draft Actuarial Rules in relation to Long Term Insurance Business
§ Guidance Notes on the Calculation of Capital Adequacy Requirement for Long Term Insurance Business
These working documents have been prepared by the Financial Services Commission after restricted initial consultation with the securities and insurance industry.
The Securities Bill
The proposed Securities Bill hinges on a modern approach to regulation and supervision based on international standards recommended by the International Organisation of Securities Commissions (IOSCO)-of which Mauritius is a member. The Bill also takes into account some minor outstanding issues relating to the regulation of the securities market that were identified by the Financial Sector Assessment Programme (FSAP)- a joint initiative of the World Bank and the IMF-which found - “a high level of compliance with internationally accepted norms and best practices” within the financial sector in Mauritius.
The principal objective of the proposed Bill is to facilitate trading of securities in an orderly, fair and transparent manner. The proposed Bill will apply to securities, futures contracts on securities or market indices negotiable on an organised market and options on these contracts, and public offer of shares owned directly or indirectly by the Government of the Republic of Mauritius. The Bill provides for the regulation of market infrastructure, market intermediaries, self-regulatory organisations, the offering and trading of securities and takeover bids.
The Securities (Collective Investment Schemes) Regulations
Part VII of the Securities Bill contains substantive provisions relating to collective investment schemes. These provisions will be supplemented by the Securities (Collective Investment Schemes) Regulations. The proposed Regulations introduce a comprehensive legal regime for the establishment, management and regulation of collective investment schemes. The Regulations propose a wider array of vehicles that could be used for structuring collective investment schemes. Further, the proposed Regulations clarify the responsibilities of the operators and functionaries of a collective investment scheme and introduce measures to improve corporate governance in relation to collective investment schemes in general and to their functionaries in particular.
The Investment Limited Partnership Bill
The Investment Limited Partnership Bill which provides a statutory framework for a modern tax-transparent investment vehicle for specialized collective investment schemes is closely interconnected with the Securities Bill which allows a collective investment scheme to be structured as a limited partnership.
The proposal is based on the representations which the FSC received from industry professionals. To maintain our competitiveness as a financial centre it had become essential that investors using Mauritius should be given the option of setting up a collective investment scheme as an investment limited partnership.
The Insurance Bill
The purpose of the Insurance Bill is to improve further the soundness of the insurance market in Mauritius. The objective is to enhance the regulatory and supervisory framework for the insurance industry and to provide greater protection to policy holders and other beneficiaries.
As a leading international financial services centre, Mauritius considers it important to demonstrate its full compliance with International Association of Insurance Supervisors (IAIS) standards and principles. The Bill which reflects IAIS’ standards and principles will contribute to the development of the insurance industry in Mauritius and to enhance consumer protection.
In line with the IAIS standards and principles the Bill requires the separation of long term and general insurance businesses. Transitional provisions will be made with respect to existing composite insurers conducting both long term and general insurance businesses for effecting the segregation of these insurance businesses.
The Bill also provides for a limitation of control on long term insurance businesses. Accordingly, no person will be allowed to acquire or hold shares or any other interest in an insurer which results in that person alone or together with an associate exercising control over the company without the prior approval of the FSC. Transitional provisions will be made for the implementation of the maximum shareholding of insurance companies. Existing shareholders will be allowed adequate time to meet this requirement.
All comments on the above-mentioned working documents should be sent on or before 02 August 2004 to-
The Permanent Secretary
Ministry of Industry, Financial Services and Corporate Affairs
Level 7, Air Mauritius Centre
Port Louis
Tel: 210 7100 (ext 195)
Fax: 211 0855
Email: mind@mail.gov.mu
Website: http://industry.gov.mu