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Financial Institutions Must Meet Fit and Proper Criteria: Mauritius
In a move aimed at strengthening corporate governance in the financial sector, the Mauritian government has introduced new guidelines for registering and overseeing senior management of banks and non-banking financial institutions.
Background
The Banking Act 2004 requires that senior officers undergo a rigorous vetting process before taking up their positions. The Bank of Mauritius (BoM) must be satisfied that the appointees are fit and proper persons, with a strong emphasis on competence, honesty, integrity, and financial soundness.
Fit and Proper Criteria
The new guidelines provide a detailed framework for assessing the fitness and probity of directors, senior officers, and shareholders holding significant interests in financial institutions. The process involves completing a questionnaire, which must be submitted to the BoM prior to approval.
A fit and proper person is defined as someone who can discharge their responsibilities competently, honestly, and correctly, with no conflicts of interest or unethical behavior. The criteria for assessment include:
- Competence and capability
- Honesty, integrity, diligence, fairness, reputation, and good character
- Financial soundness
Roles and Responsibilities
The guidelines also outline the roles and responsibilities of the board of directors, chief executive officer, and external auditors in ensuring that senior management meets the fit and proper criteria.
National Code of Corporate Governance
In addition to the Banking Act 2004, financial institutions are required to comply with the National Code of Corporate Governance 2016, which sets out eight principles for good governance. The code emphasizes:
- Accountability
- Fairness
- Transparency
- Reporting
Codes of Ethics and Banking Practice
Mauritius has also issued codes of ethics and banking practice by the Mauritius Bankers Association (MBA), which aim to promote transparency and good governance practices among banks. The codes provide a set of universally acclaimed principles for banks to adhere to, with the goal of developing a culture of best ethical standards and improving customer relationships.
Conclusion
The implementation of these guidelines and codes is expected to enhance the reputation of Mauritius as a hub for financial services in Africa, while ensuring that financial institutions operate in a transparent and accountable manner.