The 2017-2018 Budget which was presented on 8th June 2017 by the Prime Minister, and Minister of Finance and Economic Development, Mr Pravind Jugnauth elaborates on several measures to consolidate the financial services sector and ensure that international norms, standards and compliance requirements are met. According to the minister, the aim is to bring the global business sector to another level so as to attract more international investors.
The following are the key measures for the financial services sector:
* Elaboration of a blueprint for the financial services sector over the next 10 years.
* Enhancing the reputation of Mauritius as a jurisdiction of substance with the GBC1 required to fulfil at least two of the criteria, making the guidelines more stringent on the substance requirement compared to at least one of six criteria.
* Supporting multinational firms to establish headquarters for Africa in Mauritius with the Stock Exchange of Mauritius to serve as a multi-currency platform.
* Encouraging Development banks to issue Infrastructure Bonds for projects in mainland Africa from Mauritius.
* Amendment to the Companies Act 2001 to allow Islamic Financial Institutions and Islamic Banks to adopt accounting standards issued by the Accounting and Auditing Organisation for Islamic Financial institution.
* Reforming tax regime for global business companies so that it evolves and meets new international requirements.
* Amendment to the Financial Services Act to provide for an increase in the number of members on the Board of the Financial Services Commission (FSC) from 7 to 9.
* Reinforcing the framework on anti-money laundering and combatting the financing of terrorism through compliance with international norms and standards.
* Improving techniques for safeguarding banking and payment transactions from any form of data breach, including cyberattacks.
*Setting up of Mauritius International Derivatives and Commodities Exchange (MINDEX), a platform for the trading of derivatives as well as spot trading of gold, diamonds and precious stones including vaulting activities.
* Positioning Mauritius as a capital raising platform.
* Alignment of the legal obligations on Special Purpose Funds with that of GBC1 companies.
Moreover, in view of making Mauritius a Fintech Hub for Africa, the Economic Development Board will engage with stakeholders to create a Regional Fintech Association to act as a think-tank with international institutions. The FSC will set the rules for regulating the Fintech activities such as peer-to-peer lending and funding, as well as mobile wallet.
The Bank of Mauritius Act will be amended to allow:
The Central Bank to license and regulate the issue of commercial papers with a view to enable corporate borrowers to diversify their source of short-term borrowings and to provide an additional instrument for investment.
* The Bank of Mauritius to invest in currencies as it may determine.
* For the issue of Shariah compliant instruments as the Central Bank may determine.
Furthermore, the Banking Act will also be amended to:
* Allow for the licensing and regulation of the issue of commercial papers; and
* Raise the minimum capital of commercial banks from Rs 200 million to Rs 400 million. Transitional Provisions will be provided to existing banks to increase their respective minimum capital to Rs 400 million.
Seems the Island Republic is on its best way to enter the top ranks of a Financial Offshore Hub!