Global Law Enforcement and Intelligence Gathering Agencies Make Significant Changes to Regulatory Landscape
In an effort to strengthen the global financial system, several key law enforcement and intelligence gathering agencies have announced significant changes to their regulatory landscape.
Enhancements to Financial Services Act 2007
The Financial Services Commission (FSC) has made amendments to the Financial Services Act 2007 aimed at enhancing its regulatory powers. The changes include:
- Scope of “Financial Services”: Removing “Global Headquarters Administration”, “Global Shared services” and “Global treasury activities” from the scope of “financial services” under the act
- Regulatory Actions Against Individuals: Enabling the FSC to initiate regulatory actions against individuals who have been performing the functions of an officer although they have not been formally approved by the FSC
- Settlement Committee: Establishing a Settlement Committee to assess the possibility for early resolution of disciplinary matters with licensees
Changes to Companies Act 2001
The Companies Act 2001 has undergone significant changes, including:
- Annual Meetings and Financial Statements: Reinstating requirements for registered companies to hold annual meetings of shareholders and file financial statements within specific timeframes
- Director Duties on Insolvency: Restoring the application of Section 162 of the act relating to director duties on insolvency
- Disclosure Requirements for Subsidiaries: Introducing new disclosure requirements for subsidiaries in annual reports
Amendments to Securities Act 2005
The Securities Act 2005 has been amended to extend the regulatory functions of an Official exchange to allow for investigations of market abuse cases involving issuers on securities exchanges.
Updates to Financial Reporting Act
The Financial Reporting Act has been updated to:
- Examinations and Assessments: Allow the Mauritius Institute of Professional Accountants (MIPA) to conduct examinations and assessments of public accountants
- Inquiries into Complaints: Empower MIPA to inquire into written complaints made against registered public accountants
- New Requirements for Audit Firms: Introduce new requirements for audit firms
New Variable Capital Company Framework
The Financial Services Commission has also introduced a new framework for Variable Capital Companies (VCCs). The VCC framework aims to provide a more flexible and efficient way for companies to operate in the financial services sector.
Under the new framework, VCCs will be required to:
- Authorization: Apply for an authorization with the FSC to operate as a VCC Fund
- Constitution: Comply with a constitution that meets the requirements of the Mauritius Companies Act 2001
- Financial Statements: Have separate financial statements for each sub-fund and SPV
Taxation of VCCs
The taxation of VCCs has also been clarified, with the commission stating that VCCs, their sub-funds and SPVs will be treated as a single entity for tax purposes unless an election is made to present separate financial statements.
FSC Issues FAQ on Variable Capital Company
In related news, the FSC has issued an FAQ on Variable Capital Companies, providing guidance on the new framework. The FAQ can be accessed at [link].
These changes are expected to have a significant impact on the global financial services sector and demonstrate the commission’s commitment to maintaining a robust regulatory environment.