THE FINANCIAL SERVICES DEVELOPMENT ACT (Act No. 13 of 2001) ARRANGEMENT OF SECTIONS PART I - PRELIMINARY

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1 55 Note: - The text of this internet version has been prepared to reflect the text passed by the National Assembly on 15 May 2001 and contains the amendments brought to the original text by subsequent legislation, including the Financial Services Development (Amendment) Act 2005 (Act No. 11 of 2005) and the Finance Act 2005 (Act No. 14 of 2005) which have not been proclaimed yet or may have been proclaimed in part only. The authoritative versions of the text and of the amending legislation are the ones published in the Government Gazette of Mauritius. THE FINANCIAL SERVICES DEVELOPMENT ACT 2001 (Act No. 13 of 2001) 15 May 2001 ARRANGEMENT OF SECTIONS Section PART I - PRELIMINARY 1. Short title 2. Interpretation PART II THE FINANCIAL SERVICES COMMISSION 3. Establishment of the Commission 4. The Board 5. Objects of the Commission 6. Functions of the Commission 7. Powers of the Commission 8. Meetings of the Board 9. The Chief Executive 10. Delegation of powers PART III - THE FINANCIAL SERVICES CONSULTATIVE COUNCIL 11. Establishment of the Council 12. Objects of the Council

2 2 PART IV ADMINISTRATION OF THE RELEVANT ACTS BY THE COMMISSION 13. Administration of relevant Acts by the Commission 14. Persons conducting financial services to be licensed and records to be kept 15. Restrictions on promotion of financial services 16. Technical committees 17. Protection of consumers of financial services and financial products 18. Compensation Fund PART V - CONDUCT OF QUALIFIED GLOBAL BUSINESS 19. Qualified global business 20. Application for a Category 1 Global Business Licence or a Category 2 Global Business Licence 21. Limitations of property and transactions 22. Validity of Category 1 Global Business Licence or Category 2 Global Business Licence and effect of its revocation 23. Registered agent 24. Management licence 25. Nominee company PART VI INSPECTION OF RECORDS BY THE COMMISSION 26. Obligation to furnish information 27. Power of inquiry and inspection PART VIA ENFORCEMENT COMMITTEE AND FINANCIAL SERVICES REVIEW PANEL Sub-Part A Enforcement Committee 27A. Establishment of Enforcement Committee 27B. Disciplinary proceedings Sub-Part B Financial Services Review Panel 27C. Financial Services Review Panel 27D. Membership of the Review Panel 27E. Termination of appointment 27F. Staff 27G. Annual Report 27H. Composition of Review Panel for particular matters 27I. Disclosure of interest by members of the Review Panel 27J. Restriction on powers of the Commission, the Enforcement Committee and SRO s after application for review is made 27K. Conduct of reviews 27L. Procedure 27M. Powers of Review Panel

3 3 27N. Protections 27O. Failure to comply with summons 27P. Determination 27Q. Judicial Review 27R. Financial Services Fund 27S. Administration of the Fund 27T. Audit and accounts Sub-Part C Financial Services Fund 28. Staff of the Commission 29. Conditions of service of employees 30. General Fund 31. Transfer of assets and liabilities 32. Provisions relating to staff 33. Confidentiality 34. Disclosure of interest 35. Annual report PART VII ADMINISTRATION PART VIII THE FINANCIAL SERVICES PROMOTION AGENCY 36. Application of Part VIII 37. The Financial Services Promotion Agency 38. Objects, functions and powers of the Agency 39. The Director of Financial Services Promotion Agency 40. One-stop service 41. Immunity and protection 42. Exemption 43. Offences and penalties 43A. Prosecution 44. Jurisdiction 45. Regulations and Rules 46. Consequential amendments 47. Transitional provisions 48. Repeal and savings 49. Commencement PART IX MISCELLANEOUS

4 4 An Act To provide for the establishment and management of a Financial Services Commission to regulate the non-bank financial services, the establishment of a Financial Services Consultative Council which will serve as a forum for discussions of the innovative developments and international trends in the field of financial services and of a distinct and separate Financial Services Promotion Agency for the promotion of the development of the financial services industry in Mauritius; and to provide for matters connected therewith and incidental thereto. ENACTED by the Parliament of Mauritius, as follows - 1. Short title PART I - PRELIMINARY This Act may be cited as the Financial Services Development Act Interpretation In this Act - bank has the same meaning as in the Banking Act 2004; Amended by [Act No.35 of 2004] Bank of Mauritius means the Bank of Mauritius established under the Bank of Mauritius Act 2004; "Board" means the Board referred to in section 4; Category 1 Global Business Licence means a licence issued under section 20(5) and includes a licence issued to - an external insurer; and an insurance manager; Added by [Act No.11 of 2005] Category 2 Global Business Licence means a licence issued under section 20(5); Chairperson means the Chairperson of the Board; Chief Executive means the Chief Executive of the Commission appointed under section 9; "Commission" means the Financial Services Commission established under section 3;

5 5 "confidential information" includes any document, books of account, balance sheet, profit and loss account or any matter which is to be treated as confidential under section 33; controller in relation to a corporation, means a person- who is a member of the governing body of the corporation; who has the power to appoint or remove a member of the governing body of the corporation; whose consent is needed for the appointment of a person to be a member of the governing body of the corporation; (d) who, either by himself or through one or more other persons - is able to control, or exert significant influence over, the business or financial operations of the corporation whether directly or indirectly; holds or controls not less than 20 percent of the shares of the corporation; (iii) has the power to control not less than 20 percent of the voting power in the corporation; (iv) holds rights in relation to the corporation that, if exercised, would result in paragraphs and (iii); (e) (f) who is a parent undertaking of that corporation, or a controller of such parent undertaking; who is a beneficial owner or ultimate beneficial of the persons specified in paragraphs to (e) and who appears to the Commission to be a controller of that corporation; Added by [Act No.11 of 2005] corporation means a body corporate or incorporate, formed in Mauritius or elsewhere; and includes any trust, société or partnership or any other body of persons; Council means the Financial Services Consultative Council established under section 11; "Court" means the Supreme Court; document -

6 6 means a document in any form; and includes (iii) any writing on any material; a book, graph or drawing; information recorded or stored by any electronic or other technological means and capable with or without the aid of any equipment of being reproduced; employee means an employee of the Commission appointed under section 28; Enforcement Committee means the Enforcement Committee established under section 27A; external insurer has the same meaning as in the Insurance Act 2005; financial crime means - an offence that involves fraud or dishonesty under the relevant Acts or any other enactment; or an offence under the Financial Intelligence and Anti-Money Laundering Act 2002 or under the Prevention of Terrorism Act 2002; Added by [Act No.11 of 2005] financial services means any financial services or financial business activities governed by the relevant Acts; and includes the financial services or financial business activities specified in Part II of the First Schedule; Fund means the Financial Services Fund set up under section 27R; guidelines includes codes, guidance notes, practice notes and such other similar instruments issued by the Commission; insurance manager has the same meaning as in the Insurance Act 2005; Added by [Act No.11 of 2005] licence means any licence issued under any relevant Act; and includes a global business licence; or

7 7 a management licence; licensee means the holder of a licence; and includes any person registered or approved under the Relevant Acts; and any institution established to provide any service under the relevant Acts; Amended by [Act No.20 of 2002] management company means a company holding a management licence; "management licence" means a management licence issued under section 24(2); member means a member of the Board and includes the Chairperson and the Vice- Chairperson; "Minister" means the Minister to whom responsibility for the subject of financial services is assigned; officer means a member of the board of director, a chief executive, a managing director, a chief financial officer or chief financial controller, a manager, a secretary, a partner, a trustee or a person holding any similar function with a licensee; Added by [Act No.11 of 2005] "public sector agency" includes any Ministry or Government Department, local authority or statutory body; "qualified global business " has the meaning assigned to it by section 19(2); registered agent has the meaning assigned to it by section 23; Registrar has the same meaning as in the Companies Act 2001; relevant Acts means this Act and the Acts specified in Part I of the First Schedule; and includes any regulations made under these Acts; Amended by [Act No.20 of 2002] Review Panel means the Financial Services Review Panel established under section 27C; rules means rules made by the Commission under a relevant Act;

8 8 SRO means a self-regulatory organisation, whether corporate or unincorporate, whose object is to regulate the operations of its members or of the users of its services, their standards of practice and business conduct in order to better protect investors and consumers of securities or related services and includes such other organisations as may be declared or recognised as such by the Commission; Added by [Act No. 11 of 2005] "technical committee" means a technical committee set up under section 16; trust has the same meaning as in the Trusts Act 2001; Vice-Chairperson means the Vice-Chairperson of the Board appointed under section 4. PART II THE FINANCIAL SERVICES COMMISSION 3. Establishment of the Commission (1) There is established for the purposes of this Act a Financial Services Commission. (2) The Commission shall be a body corporate. 4. The Board (1) The Commission shall be administered and managed by a Board. (2) The Board shall consist of - a Chairperson, suitably qualified and experienced in the field of business, finance or law, appointed by the Prime Minister on such terms and conditions as the Prime Minister may determine; and a Vice-Chairperson and not more than 5 other members, suitably qualified and experienced in the field of business, finance or law, appointed by the Minister on such terms and conditions as the Minister may determine. (3) Every member shall hold office for a period of 3 years on such terms and conditions as the Minister may determine and shall be eligible for re-appointment. Amended by [Act No.34 of 2004] (4) Every member shall be paid by the Commission such fees as the Board may, with the approval of the Minister, determine. 5. Objects of the Commission

9 9 (1) The objects of the Commission shall be - (d) (e) (f) to work out objectives, policies and priorities for the development of the financial services sector and to make recommendations to the Minister; 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 ensure the sound conduct of business in the financial services sector; to ensure the orderly administration of the financial services activities; and to elaborate policies which are directed to ensuring the fairness, efficiency and transparency of financial and capital markets in Mauritius. (2) Notwithstanding the Bank of Mauritius Act, the Bank of Mauritius may make available to the Commission such infrastructure, know-how and other facilities of the Bank as the Commission may need to enable it to attain its objects under the Act. 6. Functions of the Commission The Commission shall have such functions as are necessary to further most effectively its objects, and in particular, shall - (d) (e) (f) be responsible for the administration of the relevant Acts; license, regulate, monitor and supervise the conduct of business activities in the financial services sector; carry out investigations and take measures to suppress illegal, dishonourable and improper practices, market abuse and financial fraud in relation to any activity in the financial services sector; set rules and guidance governing the conduct of business in the financial services sector; prepare, develop and implement a plan for the better integration of the financial services industry ; carry out research, commission studies and disseminate information in the field of financial services;

10 10 (g) (h) (j) (k) (l) (m) (n) (o) promote public understanding of the financial system including awareness of the benefits and risks associated with different kinds of investment; ensure co-ordination and co-operation between public sector agencies and private corporations engaged in the financial services sector; establish norms and standards in order to preserve and maintain the good repute of Mauritius in the financial services sector; establish and maintain such links and liaison with international agencies in the field of financial services as may be necessary for the furtherance of its objects; take measures for the better protection of consumers of financial services; identify and take measures to prevent and eliminate investment business abuse; collect, compile, publish and disseminate statistics in respect of the non-banking financial services sector; advise the Minister generally on any matter relating to the financial services sector; and do such acts or things as are incidental or conducive to the attainment of its objects. Amended by [Act No.20 of 2002] 7. Powers of the Commission (1) The Commission shall have such powers as are necessary to enable it to effectively discharge its functions and may, in particular - make rules, set standards and provide guidelines; Amended by [Act No.11 of 2005] (d) set up such technical committees as it deems fit to assist it in the discharge of its functions under the relevant Acts; in relation to any case or class of cases, for good cause, grant exemption or partial exemption from compliance with any rules or guidelines issued under paragraph subject to such conditions as it may impose; give directions to ensure compliance with a relevant Act, any rule or guideline;

11 11 (e) with respect to a present or past licensee or any person who is a present or past officer, partner, shareholder, or controller of a licensee - issue a private warning; issue a public censure; (iii) disqualify a licensee from holding a licence or a licence of a specified kind for a specified period; (iv) in the case of an officer of a licensee, disqualify the officer from a specified office or position in a licensee for a specified period; (v) impose an administrative penalty; or (vi) revoke a licence. Added by [Act No.11 of 2005] (2) Any person to whom a direction has been given under subsection (1)(d) shall comply with the direction. (3) Deleted by [Act No. 11 of 2005] (4) Deleted by [Act No. 11 of 2005] (5) Deleted by [Act No. 11 of 2005] (6) Deleted by [Act No. 11 of 2005] (7) Deleted by [Act No. 14 of 2005] (8) In the discharge of its functions under section 6(m), the Commission - may require any licensee to furnish such statistical information relating to his business or to the business administered or managed by him for his clients at such intervals and within such time as may be required by the Commission; may, subject to paragraph, publish and disseminate any information obtained under paragraph in any aggregate form and figures; shall not publish or disseminate information relating to the individual affairs of any particular client of the licensee. (9) Any licensee who fails to comply with a requirement under subsection 8 shall commit an offence. (10) The Commission may, for the purpose of section 6(j), enter into an agreement or arrangement for the exchange of information with a foreign supervisory institution having responsibility to supervise financial institutions and the conduct of financial markets and the

12 12 provision of financial services, where the Commission is satisfied that the foreign supervisory institution has the obligation to protect the confidentiality of the information so imparted. Added by [Act No.20 of 2002] (11) The Commission may publish a bulletin at such intervals it thinks fit for the purpose of giving public notice of any decision or determination by the Commission or the Review Panel under any of the relevant Acts; any statistical report or analysis; and any other information the Commission deems relevant. Added by [Act No.11 of 2005] 8. Meetings of the Board (1) The Board shall meet as often as is necessary but not less than once every month and at such time and place as the Chairperson thinks fit. (2) In the absence of the Chairperson or the Vice-Chairperson at a meeting of the Board, the members present shall elect a member to act as Chairperson for that meeting. (3) Everything authorised or required to be done by the Board shall be decided by a simple majority of the members present and voting. (4) At any meeting of the Board, 4 members shall constitute a quorum. (5) The Board may co-opt such other person as may be of assistance in relation to any matter before the Board. (6) Any person co-opted under subsection (5) shall have no right to vote on any matter before the Board. (7) Subject to the other provisions of this section, the Board shall regulate its meetings and proceedings in such manner as it thinks fit. 9. The Chief Executive (1) There shall be a chief executive officer of the Commission who shall - be known as the Chief Executive; and be appointed by the Board with the approval of the Minister, on such terms and conditions as it thinks fit. (2) The Chief Executive shall be responsible for the execution of the policy of the Board and for the control and management of the day-to-day business of the Commission.

13 13 (3) In the exercise of his functions, the Chief Executive shall act in accordance with such directions as he may receive from the Board. (4) The Chief Executive may, with the approval of the Board, delegate his functions or any power delegated to him under section 10 to an employee. (5) The Chief Executive shall, unless otherwise directed by the Board, attend every meeting of the Board and may take part in its deliberations but shall not be entitled to vote on any matter before the Board. 10. Delegation of powers (1) Subject to subsection (2) and to such instructions and rules of a general nature as it may give or make, the Board may delegate to the Chairperson, the Vice-Chairperson, the Chief Executive or to a technical committee such of its powers and functions under the relevant Acts as may be necessary to assist in the effective management of the Commission other than the power - (d) (e) to borrow money; to raise loans; to enter into any transaction in respect of capital expenditure which exceeds one million rupees; to make rules and provide guidelines under a relevant Act; to grant exemption under section 7(1) from compliance with any rules and guidelines. Amended by [Act No.11 of 2005] (2) Subject to paragraph, no document relating to any transactions referred to in paragraphs to (e) of subsection (1), shall be executed or signed by or on behalf of the Commission unless it is signed by the Chairperson and the Chief Executive, or, in the absence of the Chairperson, by the Vice-Chairperson or any other member appointed by the Board for that purpose. Amended by [Act No.20 of 2002] In the absence of the Chief Executive, his powers under paragraph shall be exercised by such employee as may be appointed by the Board for that purpose. PART III THE FINANCIAL SERVICES CONSULTATIVE COUNCIL 11. Establishment of the Council (1) There is established for the purposes of this Act a Financial Services Consultative Council, which shall not be a body corporate.

14 14 (2) The Council shall consist of (d) (e) (f) the Minister to whom responsibility for the subject of finance is assigned, who shall be the Chairperson; the Minister to whom responsibility for the subject of financial services is assigned, who shall be the Vice-Chairperson; the Governor of the Bank of Mauritius; the Chairperson of the Commission; the Chief Executive; and not more than 6 other members designated by the Minister from amongst persons of high calibre and of international repute in their relevant fields. (3) The Council shall meet at such time and place as the Chairperson thinks fit. (4) The Council shall regulate its own proceedings. 12. Objects of the Council The objects of the Council shall be to act as a think-tank and to serve as a platform for discussions of the latest concepts and international trends in the field of financial services and to formulate suggestions and ideas for the development of the financial services sector. PART IV ADMINISTRATION OF THE RELEVANT ACTS BY THE COMMISSION 13. Administration of relevant Acts by the Commission (1) The Commission shall administer the relevant Acts with such modifications, adaptations, qualifications and exceptions as may be necessary to bring them in conformity with the provisions of this Act. (2) On the recommendation of the Commission, the Minister may, by regulations, provide for the regulation, operation and supervision of any other financial business activity by the Commission. 14. Persons conducting financial services to be licensed and records to be kept (1) Notwithstanding any other enactment, no person shall conduct any business activity in the financial services sector without a licence issued by the Commission. (2) Where the Commission is satisfied that the requirements for the registration of any person or the granting of a certificate, licence or other authorisation to any person are fulfilled under the relevant Acts and that the person is a fit and proper person, it may, subject to the provisions of this Act, issue a licence pursuant to subsection (1).

15 15 (3) Every person required to be licensed under this Act shall, for the purpose of this Act and any regulations made thereunder, implement such procedures for retaining internal records of every customer s identity as may be specified in guidelines issued by the Commission under this Act or under section 18(1) of the Financial Intelligence and Anti- Money Laundering Act 2002 and shall, in particular, keep in relation to his business activities in the financial services sector, a full and true written record, whether electronic or otherwise, in the English or French language of every transaction he makes. (4) Notwithstanding any other enactment, every record under subsection (3) shall be kept for a period of at least 7 years after the completion of the transaction to which it relates. Amended by [Act No.34 of 2003] (5) The Commission shall keep a register of persons licensed under this section which shall be - in such form and with such particulars; published at such intervals and in such manner; open to public inspection at such time; as the Commission may decide. Amended by [Act No.20 of 2002] 15. Restrictions on promotion of financial services (1) No person other than a person licensed, authorised or approved under a relevant Act shall hold himself out to provide financial services in any manner whatsoever and, in particular by publishing or causing to be published an advertisement for or in connection with the provision of financial services that requires a licence, authorisation or approval under a relevant Act. (2) Where the Commission is satisfied that a person has published or caused to be published an advertisement - contrary to subsection (1); or in a manner which is unclear, false or misleading in any material particular, it may, in writing, direct that person to cease or modify the advertisement. 16. Technical committees Repealed and replaced by [Act No.11 of 2005] (1) The Board may set up such technical committees as may be necessary to examine and report on any matter in relation to the administration of any relevant Act referred to them by the Board or the Chief Executive.

16 16 (2) Every technical committee shall consist of not less than 3 but not more than 7 members including a chairperson, who shall be appointed by the Board on such terms and conditions as the Board thinks fit. (3) A technical committee may co-opt, with the approval of the Board, any person and may set up such sub-committees as it considers necessary. (4) The Board may, at any time, terminate the appointment of any member of a technical committee for misconduct, default or breach of trust in the discharge of his duties as member or for any other good or sufficient cause. (5) A technical committee shall - meet as often as is necessary and at such time and place as the chairperson of the Committee thinks fit; meet when required to do so by the Board; and subject to the other provisions of this section, regulate its meetings and procedures as it thinks fit. 17. Protection of consumers of financial services and financial products (1) For the purposes of discharging its functions under this Act, the Commission may develop and promote such programmes and initiatives, where it deems necessary in collaboration with financial institutions or bodies representing the financial services industry, to inform and educate consumers or potential consumers of financial products and financial services. (2) Any consumer of a financial product or of financial services who is aggrieved by any act or omission of a service provider in the financial services sector may make a complaint in writing to the Commission. (3) The Chief Executive shall examine any complaint made under subsection (2) and shall take such action as it thinks fit. (4) The Commission shall, where possible, give a reply to the complainant within 3 months as from the date it receives the complaint. (5) Where in the course of an examination of a complaint it is suspected that there is a breach of a relevant Act or a rule, the Chief Executive may conduct an investigation under section 27. (6) The Chief Executive shall not examine a complaint where it is made 12 months after the date of the act or omission unless otherwise authorised by the Board. (7) The Commission may make such rules or provide such guidelines as may be necessary for the purposes of this section.

17 17 Repealed and replaced by [Act No. 11 of 2005] 18. Compensation Fund (1) There shall be established and maintained, in such manner as may be prescribed, one or more compensation funds for the purposes of compensating investors and other persons who suffer or have suffered financial losses as a result of the inability or eventual inability by a corporation licensed under the relevant Acts to satisfy claims arising from any civil liability incurred by it in connection with services provided, or as a result of fraud or defalcation by the corporation or any of its employees or officers, or as a result of the insolvency of such corporation. (2) Without prejudice to the generality of the foregoing, regulations made under subsection (1) may - (d) provide that any compensation fund that is established shall be managed by such committee as may be set up by the Commission; provide for the levying of contributions from corporations licensed under the relevant Acts or for such other means for financing the fund, and for power to subscribe to insurance policies; provide for the mode of determining the right to compensation payable under the fund, the power to settle claims, the quantum of the compensation, and for the right of subrogation to the fund in order to recover from any corporation or person whose liability is extinguished or reduced by the payment of the compensation; and specify the terms and conditions on which compensation is to be payable. PART V CONDUCT OF QUALIFIED GLOBAL BUSINESS 19. Qualified global business (1) This Part shall apply to qualified global business until such time as may be prescribed. (2) Subject to the other provisions of this section, a qualified global business is any business or other activity specified in the Second Schedule and which is carried on from within Mauritius with persons all of whom are resident outside Mauritius and which is conducted in a currency other than the Mauritius currency; or which is carried on by a private company or a corporation other than a trust, in such legal form as may be acceptable to the Commission - which does not conduct business with persons resident in Mauritius nor conduct any dealings in Mauritius currency;

18 18 which holds a Category 2 Global Business Licence; and (iii) subject to such restrictions and limitations as may be specified in the rules made by the Commission. (3) The Minister may, by regulations Amended by [Act No. 11 of 2005] amend the Second Schedule to provide for any other business or activity to be a qualified global business; and provide for the regulation, operation and supervision of any qualified global business by the Commission. (4) Deleted by [Act No.11 of 2005] (5) Deleted by [Act No. 11 of 2005] 20. Application for a Category 1 Global Business Licence or a Category 2 Global Business Licence (1) Any person who wishes to conduct a qualified global business may apply - in respect of an activity referred to in section 19(2), for a Category 1 Global Business Licence; in respect of a private company or a corporation referred to in section 19(2), for a Category 2 Global Business Licence. Repealed and replaced by [Act No.11 of 2005] (2) An application for a Category 1 Global Business Licence or a Category 2 Global Business Licence shall - be made in such form and in such manner as may be approved by the Commission; be of no effect unless certified by a law practitioner qualified under the Law Practitioners' Act 1984 that it complies with the laws of Mauritius. (3) On receipt of an application under subsection (2), the Chief Executive may - require the applicant to give such further information as may be necessary to determine the application;

19 19 seek the opinion of any public sector agency that is likely to be concerned with the application; refer the application to the Commission with recommendations, observations and comments. (4) The Commission may, within 15 days of an application - reject the application without giving any reasons; refer the application back to the Chief Executive for further enquiry; approve the application on such terms and conditions as it thinks fit where it is satisfied that the application meets all licensing requirements as set out in such rules or guidelines as may be issued by the Commission. Amended by [Act No.11 of 2005] (5) Where an application for a Category 1 Global Business Licence or a Category 2 Global Business Licence, as the case may be, is approved by the Commission, the Chief Executive shall, after payment by the applicant of such fee as may be prescribed issue the Category 1 Global Business Licence or Category 2 Global Business Licence on behalf of the Commission subject to such terms and conditions as the Board may impose. (6) Where a proposal or a project - for the formation of a corporation which intends to carry on a qualified global business under a Category 1 Global Business Licence; for the formation of a company which intends to carry on a qualified global business under a Category 2 Global Business Licence, is submitted to the Commission, the Board may direct the Chief Executive to issue a letter of intent stating the terms and conditions under which a Category 1 Global Business Licence or a Category 2 Global Business Licence, as appropriate, may be issued. (7) A letter of intent issued under subsection (6) - may be revoked at any time without any reason being given; shall not imply or be construed in any way as a promise or an undertaking by the Board or the Commission, nor import any obligation on the part of the Board or the Commission, to grant a Category 1 Global Business Licence or a Category 2 Global Business Licence or otherwise determine an application. 21. Limitations of property and transactions (1) Subject to subsection (2), a corporation holding a Category 1 Global Business Licence or a Category 2 Global Business Licence shall not hold -

20 20 immovable property in Mauritius; any share, debenture, security or any interest in any company incorporated or registered under the Companies Act 2001 or in any société or partnership under the Code Civil Mauricien or the Code de Commerce, or in any body corporate or association formed or registered under any enactment in force in Mauritius, other than in a corporation holding a Category 1 Global Business Licence or a Category 2 Global Business Licence; Amended by [Act No. 20 of 2002] any account in a bank in Mauritius currency. (2) A corporation holding a Category 1 Global Business Licence may - open and maintain with a bank an account in Mauritius currency for the purpose of its day to day transactions arising from its ordinary operations in Mauritius; Amended by [Act No.35 of 2004] where authorised by the terms of its Category 1 Global Business Licence, or otherwise permitted under any other enactment, lease, hold, acquire or dispose of an immovable property or any interest in immovable property situated in Mauritius; invest in any securities listed on a securities exchange licensed under the Securities Act Amended by [Act No. 14 of 2005] (3) Notwithstanding any other provisions of this section and any other enactment, the Commission may authorise a holder of a Category 1 Global Business Licence to deal or transact with residents in Mauritius on such terms and conditions as it thinks fit. For the purposes of paragraph, resident in Mauritius means - in relation to an individual, a person who has his domicile in Mauritius; in relation to a corporation, a body incorporated or registered under the laws of Mauritius other than a corporation holding a Category 1 Global Business Licence or a Category 2 Global Business Licence. Amended by [Act No. 20 of 2002] 22. Validity of Category 1 Global Business Licence or Category 2 Global Business Licence and effect of its revocation

21 21 (1) A corporation holding a licence issued under section 20(5) shall pay such annual licence fee as may be prescribed. (2) Subject to the other provisions of this section, a Category 1 Global Business Licence or a Category 2 Global Business Licence shall lapse where the prescribed annual licence fee in respect of the licence is not settled within the prescribed time limit. Repealed and replaced by [Act No.11 of 2005] (3) The Commission may at any time revoke a Category 1 Global Business Licence or a Category 2 Global Business Licence where it - has reason to believe that the holder of the licence is acting or has acted - in contravention with this Act or the Financial Intelligence and Anti-Money Laundering Act 2002 or any regulations made under those Acts; Amended by [Act No.20 of 2002] in breach of any conditions of the licence; is of opinion that the revocation is necessary to protect the good repute of Mauritius as a centre for financial services. (4) Before revoking a licence under subsection (3), the Commission - may suspend the licence; shall afford the holder of the licence an opportunity to submit any representations in writing. (5) When a licence has lapsed under subsection (2) or is suspended under subsection (4), the corporation shall not, except with the approval of the Commission, transact any business. (5A) Where a Category 1 Global Business Licence or a Category 2 Global Business Licence of a corporation has lapsed under subsection (2), the Commission may issue such directions to the corporation as it thinks fit for the orderly winding-up and dissolution of the corporation. Added by [Act No.11 of 2005] (6) Where a Category 1 Global Business Licence or a Category 2 Global Business Licence is revoked under subsection (3) the Chief Executive shall forthwith cause notice of the revocation to be published in the Gazette; the corporation shall, within 3 months of the date of the revocation -

22 22 start winding up or dissolution procedures under the Companies Act 1984 and, where applicable, under any other enactment; and take any measures and make any arrangements as it deems appropriate in respect of the disposal of its assets and liabilities. 23. Registered agent (1) A company holding a Category 2 Global Business Licence shall at all times have a registered agent in Mauritius who shall be a management company or such other person as may be approved by the Commission. (2) A registered agent shall be responsible for providing such services as the company may require in Mauritius including - the filing of any return or document required under this Act and the Companies Act 2001; and the receiving and forwarding of any communication from and to the Commission or the Registrar. (3) A registered agent shall be subject to such obligations in relation to appointment, change of registered address or registered agent and such other matters for the purposes of subsection (2) as may be prescribed. 24. Management licence (1) A company whose main activity is to set up, manage and provide nominee and other services to a corporation which carries on or intends to carry on any qualified global business; and such class of corporations as may be prescribed; or act as corporate trustee or qualified trustee under the Trusts Act 2001, shall apply to the Commission for a management licence. (2) The Commission may - on application under subsection (1) and on payment of such annual fee as may be prescribed, issue a management licence on such terms and conditions as it thinks fit; alter a management licence.

23 23 (3) A management licence shall be valid for such period as may be specified in the licence; Where the annual fee in respect of a management licence is not paid within one month after the date when payment becomes due, the Commission may, in writing, notify the holder of the licence that the licence has lapsed. (4) A company holding a management licence shall file with the Commission its audited accounts within 6 months after the close of its financial year. The financial year of a company holding a management licence shall be - in respect of its first financial year, for any period of 6 to 15 months from the date of its incorporation and in respect of every subsequent financial year, for a period not exceeding 12 months; or where there is a change in its financial year, for a period not exceeding 18 months. (5) The Commission may at any time revoke a management licence where it - has reason to believe that the holder of the management licence, or a corporation holding a Category 1 Global Business Licence or Category 2 Global Business Licence and managed by the holder of the management licence, is acting or has acted - (iii) in contravention with this Act or any regulations made thereunder; in breach of any term or conditions of its licence; in breach of any direction issued by the Commission, or of the guidelines and codes issued under this Act;

24 24 is of opinion that the cancellation or revocation is necessary to protect the good repute of Mauritius as a centre for qualified global business. (6) Before revoking a management licence under subsection (5), the Commission shall afford the holder an opportunity to submit any representations in writing. 25. Nominee company (1) Any company holding a management licence may, for the purposes of performing the functions of a nominee company and subject to the approval of the Commission, form a nominee company. (2) The nominee company shall be a private company registered under the Companies Act 2001; expressly limit its objects to acting as a nominee company with respect to corporations and to matters ancillary or incidental thereto. PART VI INSPECTION OF RECORDS BY THE COMMISSION 26. Obligation to furnish information (1) Subject to the other provisions of this section, every person who carries on an activity in the financial services sector shall, when so required by the Commission, furnish all such information and produce such records or documents as may be demanded of him by the Commission in order to ensure and monitor compliance with the relevant Acts or with any regulations, directions, rules, codes or guidance notes made, or to carry out its general powers of supervision, under those Acts. Amended by [Act No.20 of 2002] (2) A corporation which carries on activities in the financial services sector and a corporation holding a Category 1 Global Business Licence shall file with the Commission every year an audited financial statements prepared in accordance with International Financial Reporting Standards. Amended by [Act No.20 of 2002 and Act No.11 of 2005] (3) Except where otherwise required by the Commission or specifically prescribed under any relevant Acts, a corporation specified in subsection (2) or a corporation holding a Category 1 Global Business Licence shall file with the Commission audited financial statements within 6 months after the close of its financial year. For the purposes of paragraph, financial year means - in respect of its first financial year, for any period not exceeding 18 months from the date of its incorporation and in respect of every subsequent financial year, for a period not exceeding 12 months; or

25 25 where there is a change in its financial year, for a period not exceeding 18 months. (4) A corporation holding a Category 1 Global Business Licence shall be deemed to comply with subsection (2) where the audited financial statements are prepared in accordance with such internationally recognised accounting standards as may be agreed with the Commission from time to time. Amended by [Act No.20 of 2002] (5) The Commission may exempt any class of corporation holding a Category 1 Global Business Licence from the requirement of subsection (2) 27. Power of inquiry and inspection Amended by [Act No.14 of 2005] (1) On receipt of a complaint under section 17, or where he has reasonable suspicion that a licensee has committed, is committing or is likely to commit a breach of any of the relevant Acts; any condition of his licence; or (iii) any direction issued by the Commission; has carried on, is carrying or is likely to carry out any activity which may cause serious prejudice to the soundness and stability of the financial system of Mauritius or to the reputation of Mauritius or which may threaten the integrity of the system, the Chief Executive may make an inquiry into the business or any part of the business of the licensee, and for that purpose may (A) (B) (C) by notice request the production of any documents, books or records to be inspected at all such reasonable time and place, including on the business premises of the licensee, as may be specified in the notice; take copies of, extract from, any documents, books or records so produced; seize any document or material which may be relevant to the inquiry. (2) The Chief Executive may require the person referred to in section 26(1) or any of his agents or employees to attend the inquiry referred to in subsection (1) and to produce any record or other relevant document for the purpose of the

26 26 inquiry or to give evidence and may examine any such record or documents and take copies or extracts thereof; (d) a holder of a licence to furnish such information as he may reasonably require for the exercise of his functions under those Acts; any holder of a licence granted under the relevant Acts to produce for inspection, either at the business premises of the holder of the licence or at the Commission, all such books, records, accounts and documents, as may be necessary; Amended by [Act No. 14 of 2005] the Registrar, notwithstanding section 14(7) of the Companies Act 2001, to make available to him any entry, record or document registered in the register of companies for inspection. (3) The Chief Executive may retain, for such period as he considers necessary, any books, records, accounts and documents produced to him for inspection under subsection (2) and may take copies or extracts thereof. (4) For the purposes of this section, licensee and holder of a licence shall include- a corporation whose licence has expired, or has been cancelled, revoked, suspended or surrendered; or any person who is a present or past director, manager, partner or any shareholder holding more than 50 per cent of the voting rights in the licensee. Any person who fails to comply with a requirement under subsection (1) or (2) shall commit an offence and shall, on conviction, be liable to a fine not exceeding 500,000 rupees and to imprisonment for a term not exceeding 5 years. (5) The Commission may cause to be carried, on the business premises of a management company or registered agent, an inspection and audit of its books and records as and when the Commission deems it necessary in order to ensure compliance with the law, the conditions of its licence and with directions given, rules made, standards set, and guidelines provided by the Commission. Amended by [Act No. 14 of 2005] (6) Subject to section 124 of the Income Tax Act 1995, any investigation, inspection or filing of documents or request for information which any public sector agency in Mauritius may be empowered to carry out, to require or to do under any other enactment shall, in respect of a corporation holding a global business licence or of an applicant for a global business licence, be carried out, required, or done by the Commission or any person or body designated by the Commission.

27 27 (7) The Chief Executive may inspect, at the business premises of a person suspected of conducting any financial activity in the financial services sector without licence, the books, records or other documents of the person. (8) Any person who intentionally obstructs the Commission or the Chief Executive, as the case may be, when acting in the execution of his powers under this section shall commit an offence and shall, on conviction, be liable to a fine not exceeding 500,000 rupees and to imprisonment for a term not exceeding 5 years. (9) In this section, any reference to the Chief Executive shall include any person authorised in writing by the Chief Executive for the purposes of this section. Amended by [Act No.20 of 2002] PART VIA ENFORCEMENT COMMITTEE AND FINANCIAL SERVICES REVIEW PANEL 27A. Establishment of Enforcement Committee Sub-Part A - Enforcement Committee (1) The Board shall establish a committee which shall be known as the Enforcement Committee. (2) The Enforcement Committee shall consist of - 2 Board members appointed every year by the Board; not more than 2 members of the staff of the Commission being of a grade not lower than Executive and who shall not be involved in investigations conducted under section 27; such members having the expertise that is necessary as may be coopted by the Enforcement Committee. (3) The Enforcement Committee may, in respect of a licensee, exercise the disciplinary powers of the Commission to impose an administrative sanction under the relevant Acts and in particular may - (d) issue a private warning; issue a public censure; disqualify a licensee from holding a licence or a licence of a specified kind for a specified period; in the case of an officer of a licensee, disqualify the officer from a specified office or position in a licensee for a specified period;

28 28 (e) (f) impose an administrative penalty; or revoke a licence. (4) The Enforcement Committee shall have such other functions as may be conferred upon it under a relevant Act. (5) The members of the Enforcement Committee shall be appointed on such terms and conditions as the Board shall determine. 27B. Disciplinary proceedings (1) Where the Chief Executive is satisfied on reasonable grounds that a licensee - has contravened any relevant Act, any direction, order or rule issued under a relevant Act or any condition of the licence; is carrying out his business in a manner which threatens the integrity of the financial system of Mauritius or is contrary or detrimental to the interest of the public; or has committed any financial crime, he shall refer the matter to the Enforcement Committee for such action as the Enforcement Committee thinks fit. (2) Where the Enforcement Committee intends to impose an administrative sanction against a licensee it shall issue a warning notice to the licensee, which shall state - (iii) the intention of the Enforcement Committee to impose an administrative sanction; the type and terms of the administrative sanction; and the right of the licensee to make written representations to the Enforcement Committee within such time period as the Enforcement Committee deems appropriate in the circumstances, but in any case shall not exceed 21 days from the date of the notice. Where the Enforcement Committee decides to impose an administrative sanction it shall issue a final decision notice to the person stating the type and the terms of the administrative sanction. Any licensee aggrieved by the decision of the Enforcement Committee may, within 21 days of the issue of the final decision notice, and after giving written notice to the Commission, apply to the Review Panel for review of the decision.

29 29 (d) (e) (f) (g) Where no application for review of a final decision is made to the Review Panel, the decision shall not be effective until the period of 21 days specified in paragraph has lapsed. Notwithstanding any action taken by the Enforcement Committee, the Commission may direct a licensee to take such remedial action as it thinks fit. Any administrative penalty due to the Commission shall be a debt due to the Commission and may be recovered by the Commission as a civil debt in the court of competent jurisdiction. All administrative penalties recovered by the Commission shall be paid into the Financial Services Fund. (h) For the purposes of this Sub-Part 27C. Financial Services Review Panel licensee includes any person who is a present or past licensee or any person who is a present or past officer, partner, shareholder, or controller of a licensee. Sub-Part B - Financial Services Review Panel There is established a review panel which shall be known as the Financial Services Review Panel and which shall - review decisions made by the Commission, an SRO under a relevant Act or such other body or organisation as may be provided under a relevant Act, in accordance with the relevant Act; and have such other functions as may be conferred on it by any other enactment. 27D. Membership of the Review Panel (1) The Review Panel shall consist of the following members, appointed by the Attorney-General - a Chairperson and a Deputy Chairperson, each of whom shall be a barrister of not less than 5 years standing; and 4 other members who shall be appointed and who shall be persons having experience in the field of business, finance and law. (2) Subject to this Act, a member of the Review Panel -