30 October 2010

Mauritius QROPS

A Qualifying Recognised Overseas Pension Scheme ("QROPS") is a recognised overseas pension scheme which satisfies certain requirements of Her Majesty's Revenue and Customs ("HMRC") in the United Kingdom. The scheme manager must notify HMRC that the scheme is a recognised overseas pension scheme and provide evidence to HMRC where required. The scheme manager must also sign an undertaking to inform HMRC if the scheme ceases to be a recognised overseas pension scheme and comply with any prescribed information requirements imposed on the scheme manager by HMRC. The recognised overseas pension scheme must not be excluded by HMRC from being a qualifying recognised overseas pension scheme.

A recognised overseas pension scheme is defined as an overseas pension scheme which is established in a country or territory mentioned in regulation 3(2) of the Pension Schemes (Categories of Country and Requirements for Recognised Overseas Schemes) Regulations 2006 - SI 2006/206. Such a scheme can be established in Mauritius which has a Double Taxation Agreement with the United Kingdom providing for the exchange of information between the fiscal authorities of the United Kingdom and Mauritius and for non-discrimination between UK Nationals and nationals of Mauritius.

29 October 2010

Mauritius Venture Capital Fund

A Venture Capital Fund may be established as a Collective Investment Scheme or Closed-end Fund. If required, it may also be registered as a Limited Life Company under the Companies Act 2001

A Collective Investment Scheme (“CIS”) is defined under the Securities Act 2005 (“SA 2005”) as a scheme approved by the Financial Services Commission (FSC) in Mauritius:
  • whose sole purpose is the collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets as may be approved by the FSC ;

  • whose operation is based on the principle of diversification of risk;

  • that has the obligation, on request of the holder of the securities, to redeem them at their net asset value, less commission or fees; and

  • where the participants do not have day to day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management.
  • includes closed-end funds whose shares or units are listed on a securities exchange; but

  • excludes such schemes as are specified in Part II of the Schedule SA 2005.

A Closed-end Fund means an arrangement or a scheme, other than a CIS, whose object is to invest funds, collected from investors through an offer or from sophisticated investors, in a portfolio of securities, or in other financial or non-financial assets, or real property.

A "Global scheme" is defined under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) as a company or any other legal entity approved by the FSC, holding a Category 1 Global Business Licence (GBL 1) and authorized to carry out activities falling within the definition of a Collective Investment Scheme.

Conditions applicable to Global schemes

The FSC may grant an authorisation for a Global scheme provided that:

  1. information relating to the CIS Manager and the custodian as prescribed in the Regulations is submitted with the application for authorisation;

  2. a CIS administrator [e.g. OCRA (Mauritius) Limited] with a place of business in Mauritius is appointed;

  3. the accounting and reporting services are carried out by the CIS Manager, or the CIS Administrator of the scheme, having a place of business in Mauritius.

  4. The prospectus or other offering document contains the following statements in a prominent position:

    "
    Investors in [name of the Global scheme] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "
    The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  5. a certified copy of the prospectus or other offering document filed in a jurisdiction where the collective investment scheme is regulated or exempted from regulation is filed with the FSC;

  6. information is provided on the CIS Manager and the custodian, including name and registered addresses and where regulated, if applicable;

  7. information is given on whether the collective investment scheme is regulated, or shall be subject to regulation, in any jurisdiction and if so, a copy of the authorisation or similar consent of the regulator and if not, indication on what basis it is exempted from securities regulation in other jurisdictions;

  8. adequate measures are taken to prevent money laundering and financing of terrorism and provided that the FSC is satisfied that these measures meet legislative requirements.
An authorisation under section 97(5) SA 2005 may be granted subject to such terms and conditions the FSC considers necessary or desirable for the protection of participants.

Subject to FSC approval, a Global scheme may appoint and retain a CIS Manager and/or a custodian established in a foreign jurisdiction.

An “Expert Fund” is defined as a fund which is only available to expert investors. A Collective Investment Scheme (“CIS”) may apply to the Financial Services Commission (“FSC”) under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) for authorisation as an expert fund.

Such application must include the following documents / information:
  • constitutive document of the scheme;
  • measures taken to prevent money laundering and financing of terrorism;
  • latest audited financial statements;
  • a copy of the offering document given to potential investors; and
  • if applicable, information on the CIS manager as requested in regulation 6.
Conditions applicable to an Expert Fund
  1. An expert fund shall only be available to expert investors.
  2. An expert fund may appoint a manager who, where appointed, shall be the holder of:

    (a) a CIS manager licence; or

    (b) a licence issued by a regulatory body in a jurisdiction having comparable regulation as Mauritius for investor protection (e.g. FSA in UK or SEC in US)

  3. The CIS manager of an expert fund need not be resident in Mauritius.
  4. The Board of the fund or the CIS manager where appointed must satisfy itself that the fund is and continues to be managed in accordance with the fund’s constitutive documents.
  5. The Board of the fund, or the CIS manager where appointed, shall be responsible for ensuring that the provisions of these Regulations applicable to expert funds are complied with.
  6. The expert fund shall accept as investors in the fund, only such persons as the Board or CIS manager where appointed is satisfied are expert investors.
  7. The offering document or any other similar document of an expert fund shall:

    (a) contain a statement to the effect that the expert fund shall be available only to expert investors,

    (b) contain in a prominent position, the definition of an expert investor; and

    (c) shall have the following statements in a prominent position -

    "
    Investors in [name of the expert fund] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "
    The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  8. In accordance with section 30 of the Financial Services Act 2007 the audited accounts of the expert fund shall be filed by the scheme, the CIS manager or the CIS Administrator as appropriate.
Expert Investor

An “expert investor” means-

(i) an investor who makes an initial investment, for his own account, of no less than US$ 100 000; or

(ii) a sophisticated investor as defined in the Securities Act 2005 or any similarly defined investor in any other securities legislation (e.g. an accredited investor under US federal securities laws)

Exemptions for an Expert Fund

An expert fund, subject to authorisation from the FSC, shall be exempt from the provisions of the Regulations except for regulations 78 to 81 and Part I and XII.

Listing on the Stock Exchange of Mauritius

A Global Scheme/Closed-end Fund may apply to be listed on the Stock Exchange of Mauritius (SEM). The SEM charges a highly competitive initial listing fee of US$1,500 and an annual fee of US$1,500 for global funds.

A Global Scheme/Closed-end Fund, after admission to listing, must comply with the ongoing obligations of the SEM, as specified under Chapter 16 of the Listing Rules

Mauritius Real Estate Investment Trust (REIT) / Specialised CIS

To date there is no special legal regime enabling or governing a Real Estate Investment Trust (REIT) in Mauritius. Under the Securities Act 2005, a Collective Investment Scheme (CIS) may be constituted as a trust and pursuant to the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008, it is possible to apply for a Specialised CIS which is one that invests in real estate, derivatives, commodities or any other product authorised by the Financial Services Commission ("FSC"). However a person wishing to establish a Specialised CIS must apply to the FSC for a decision as to whether or not such a scheme would be authorised.

The FSC shall not give such a decision until it has determined -

(a) which of the regulations would apply;
(b) whether specific rules should be issued;
(c) conditions that would apply to such a scheme

Listing on the Stock Exchange of Mauritius

A Global Scheme/Specialised CIS may apply to be listed on the Stock Exchange of Mauritius (SEM). The SEM charges a highly competitive initial listing fee of US$1,500 and an annual fee of US$1,500 for global funds.

A Global Scheme/Specialised CIS, after admission to listing, must comply with the ongoing obligations of the SEM, as specified under Chapter 16 of the Listing Rules

27 October 2010

2010 OECD Study on Offshore Voluntary Disclosure

Vast amounts of tax are lost to offshore tax evasion every year. Governments have become increasingly aggressive in cracking down on offshore tax evasion and have new tools to tackle the problem. Now, with more than 600 tax information exchange agreements signed and double tax agreements amended, the risk of detection has increased dramatically. In this environment, governments are giving previously non-compliant taxpayers an opportunity to “come clean” through voluntary disclosure initiatives. For instance, more than 14 700 taxpayers participated in a recent initiative in the United States, and in Germany more than 20 000 taxpayers made a voluntary disclosure resulting in reported additional revenue in the range of €4 billion.

This publication shows how 39 countries (all OECD members as well as Argentina, China, India, Russia, and South Africa) deal with offshore tax evasion, comparing the case where a taxpayer has made a voluntary disclosure with the case where he has not: What penalties are imposed, what interest rate is charged, what tax is due, what is the risk of criminal prosecution and imprisonment? How does one country compare to other countries? How to design voluntary disclosure laws and programs? What do private client advisors see as some of the key design issues?

All these questions and more are addressed in the recently released OECD publication “Offshore Voluntary Disclosure: Comparative Analysis, Guidance and Policy Advice” [PDF]

Mauritius Fund : Global Scheme - CIS / Closed-end Fund / Expert Fund

A Collective Investment Scheme (“CIS”) is defined under the Securities Act 2005 (“SA 2005”) as a scheme approved by the Financial Services Commission (FSC) in Mauritius:
  • whose sole purpose is the collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets as may be approved by the FSC ;

  • whose operation is based on the principle of diversification of risk;

  • that has the obligation, on request of the holder of the securities, to redeem them at their net asset value, less commission or fees; and

  • where the participants do not have day to day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management.
  • includes closed-end funds whose shares or units are listed on a securities exchange; but

  • excludes such schemes as are specified in Part II of the Schedule SA 2005.

A Closed-end Fund means an arrangement or a scheme, other than a CIS, whose object is to invest funds, collected from investors through an offer or from sophisticated investors, in a portfolio of securities, or in other financial or non-financial assets, or real property.

A "Global scheme" is defined under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) as a company or any other legal entity approved by the FSC, holding a Category 1 Global Business Licence (GBL 1) and authorized to carry out activities falling within the definition of a Collective Investment Scheme.

Conditions applicable to Global schemes

The FSC may grant an authorisation for a Global scheme provided that:

  1. information relating to the CIS Manager and the custodian as prescribed in the Regulations is submitted with the application for authorisation;

  2. a CIS administrator [e.g. OCRA (Mauritius) Limited] with a place of business in Mauritius is appointed;

  3. the accounting and reporting services are carried out by the CIS Manager, or the CIS Administrator of the scheme, having a place of business in Mauritius.

  4. The prospectus or other offering document contains the following statements in a prominent position:

    "Investors in [name of the Global scheme] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  5. a certified copy of the prospectus or other offering document filed in a jurisdiction where the collective investment scheme is regulated or exempted from regulation is filed with the FSC;

  6. information is provided on the CIS Manager and the custodian, including name and registered addresses and where regulated, if applicable;

  7. information is given on whether the collective investment scheme is regulated, or shall be subject to regulation, in any jurisdiction and if so, a copy of the authorisation or similar consent of the regulator and if not, indication on what basis it is exempted from securities regulation in other jurisdictions;

  8. adequate measures are taken to prevent money laundering and financing of terrorism and provided that the FSC is satisfied that these measures meet legislative requirements.
An authorisation under section 97(5) SA 2005 may be granted subject to such terms and conditions the FSC considers necessary or desirable for the protection of participants.

Subject to FSC approval, a Global scheme may appoint and retain a CIS Manager and/or a custodian established in a foreign jurisdiction.

An “Expert Fund” is defined as a fund which is only available to expert investors. A Collective Investment Scheme (“CIS”) may apply to the Financial Services Commission (“FSC”) under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) for authorisation as an expert fund.

Such application must include the following documents / information:
  • constitutive document of the scheme;
  • measures taken to prevent money laundering and financing of terrorism;
  • latest audited financial statements;
  • a copy of the offering document given to potential investors; and
  • if applicable, information on the CIS manager as requested in regulation 6.
Conditions applicable to an Expert Fund
  1. An expert fund shall only be available to expert investors.
  2. An expert fund may appoint a manager who, where appointed, shall be the holder of:

    (a) a CIS manager licence; or

    (b) a licence issued by a regulatory body in a jurisdiction having comparable regulation as Mauritius for investor protection (e.g. FSA in UK or SEC in US)

  3. The CIS manager of an expert fund need not be resident in Mauritius.
  4. The Board of the fund or the CIS manager where appointed must satisfy itself that the fund is and continues to be managed in accordance with the fund’s constitutive documents.
  5. The Board of the fund, or the CIS manager where appointed, shall be responsible for ensuring that the provisions of these Regulations applicable to expert funds are complied with.
  6. The expert fund shall accept as investors in the fund, only such persons as the Board or CIS manager where appointed is satisfied are expert investors.
  7. The offering document or any other similar document of an expert fund shall:

    (a) contain a statement to the effect that the expert fund shall be available only to expert investors,

    (b) contain in a prominent position, the definition of an expert investor; and

    (c) shall have the following statements in a prominent position -

    "Investors in [name of the expert fund] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  8. In accordance with section 30 of the Financial Services Act 2007 the audited accounts of the expert fund shall be filed by the scheme, the CIS manager or the CIS Administrator as appropriate.
Expert Investor

An “expert investor” means-

(i) an investor who makes an initial investment, for his own account, of no less than US$ 100 000; or

(ii) a sophisticated investor as defined in the Securities Act 2005 or any similarly defined investor in any other securities legislation (e.g. an accredited investor under US federal securities laws)

Exemptions for an Expert Fund

An expert fund, subject to authorisation from the FSC, shall be exempt from the provisions of the Regulations except for regulations 78 to 81 and Part I and XII.

Financial Stability Board publishes principles to reduce reliance on CRA ratings

The Financial Stability Board (FSB) published today Principles for Reducing Reliance on Credit Rating Agency (CRA) Ratings.

The use (or “hard wiring”) of CRA ratings in regulatory regimes for banks and other financial institutions has contributed significantly to mechanistic market reliance on ratings. This in turn is a cause of herding and cliff effects from CRA ratings changes that can amplify procyclicality and cause systemic disruption. But, more widely, the official “seal of approval” implied by the use CRA ratings in regulatory rules has contributed to an undesirable reduction in banks’, institutional investors’ and other market participants’ own capacity for credit risk assessment and due diligence.

The goal of the principles is to reduce mechanistic reliance on ratings and to incentivise improvements in independent credit risk assessment and due diligence capacity. Banks, market participants and institutional investors should be expected to make their own credit assessments, and not rely solely or mechanistically on CRA ratings. The design of regulations and other official sector actions should support this. Accordingly, authorities should assess references to CRA ratings in laws and regulations and, wherever possible, remove them or replace them by suitable alternative standards of creditworthiness.

The principles aim to catalyse a significant change in existing practices. They cover the application of the broad objectives in five areas:
  • prudential supervision of banks
  • policies of investment managers and institutional investors
  • central bank operations
  • private sector margin requirements, and
  • disclosure requirements for issuers of securities.
The FSB has asked standard setters and regulators to consider the next steps that could be taken to translate the principles into more specific policy actions to reduce reliance on CRA ratings in laws and regulations. It recognises that changes in market practices cannot happen overnight. This means incentivising a transition to a reduced reliance over a reasonable timeframe extending into the medium term, taking into account the need for market participants to build up their own risk management capabilities to replace reliance on CRA ratings, and the particular circumstances of products, market participants and jurisdictions. Such actions have already been taken or are being considered by some international standard setters and in some jurisdictions. The FSB will monitor progress in this transition.

26 October 2010

FATF: The Review of the Standards - Preparation for the 4th Round of Mutual Evaluations

The FATF develops and promotes global standards for combating money laundering and terrorist financing, which are set out in the FATF 40 Recommendations and the 9 Special Recommendations on Terrorist Financing. Moving towards the end of its 3rd Round of Mutual Evaluations, the FATF is currently conducting a review of the 40+9 Recommendations to ensure that they remain up-to-date and relevant and to benefit from lessons learnt from implementing and evaluating the current standards. The current review is a focused and balanced exercise, aiming at maintaining the necessary stability in the standards while addressing any deficiencies or loopholes in the current FATF standards.

Work has been undertaken on the first phase of this review over the last year, considering issues including the Risk Based Approach, Customer Due Diligence, reliance on third parties and tax crime as a predicate offence for money laundering. The initial proposals emerging from this work are set out for consultation in this document.

The FATF wishes to receive the views of all interested parties on the proposals contained in this paper. Comments should be received, in English or French, by the FATF Secretariat no later than Friday 7 January 2011, and if possible the comments should be sent electronically to: fatf.consultation@fatf-gafi.org. Persons providing comments should note that a compendium of comments received will be made publicly available following the consultation.

25 October 2010

UCITS IV: Implications for the Asset Management Industry in Europe

The UCITS IV Directive is expected to bring greater harmonization of the European fund management marketplace. The Directive attempts to cover some of the regulatory gaps, and it is expected to boost cross-border fund management in Europe.

In a new report, UCITS IV: Implications for the Asset Management Industry in Europe, Celent looks at the evolution of the UCITS regime, the key provisions of UCITS IV, the UCITS market, and the impact of the UCITS IV Directive on various market participants.

Growth and consolidation are the two emerging themes. There has been a consistent rise in UCITS launches since their inception, and the market is expected to grow, both in Europe and globally. The hedge fund industry is also showing increasing interest in the UCITS product class. The Directive provides opportunities for funds to contain costs through mergers and asset pooling. A marked increase is expected in the number of super funds taking advantage of the provisions of the new directive.

Celent believes that the key contribution of the UCITS IV directive to the asset management industry in the long term will be cost savings. Fund managers may achieve annual savings of €2 billion to €3 billion by making appropriate use of the master feeder structure provision. Modeling suggests that the master feeder structure will save fund managers 10–15% on operations and custody costs.

This report evaluates the key trends, and the challenges and opportunities in the wake of the Directive. It also provides an overview of the Directive’s provisions and their impact on market participants.

Impact on all stakeholders is expected, though to varying degrees. Fund promoters, management companies, distributors, custodians, depositaries, agents, regulators, and investors will need to adapt to the new ecosystem that UCITS IV will create. In operational terms, the Directive will impose demands for standardized workflows, processes, and systems for all stakeholders,” says Ravi Nawal, Senior Analyst at Celent and author of the report.

24 October 2010

Judgments of Power From College Yearbook Photos and Later Career Success

    1. University of Toronto
    1. Tufts University

Abstract

Inferences from faces can predict important real-world outcomes. But little is known about the stability of these effects. Here the authors find that inferences of power from photos of the faces of the managing partners of America’s top 100 law firms significantly corresponded to their success as leaders, as measured by the amounts of profits that their firms earned. More interesting, this relationship was also observed when judgments were made based on photos of the leaders taken from their undergraduate yearbooks, before they began their careers or entered law school. Facial cues to success may therefore be consistent across much of the lifespan (approximately 20–50 years).


Full Text (PDF)

22 October 2010

FATF: Money Laundering Using Trusts and Company Service Providers

Trusts and Company Service Providers (TCSPs) provide an important link between financial institutions and many of their customers. TCSPs have often been used, wittingly or unwittingly, in the conduct of money laundering activities.

This comprehensive typologies report evaluates the effectiveness of the practical applications of the FATF 40+9 Recommendations as they relate to TCSPs. It also considers the role of TCSPs in the detection, prevention and prosecution of money laundering and terrorist financing.

Finally, it evaluates the potential need for additional international requirements or sector-specific international standards for TCSPs.

This typologies exercise has drawn from the research and conclusions that were made in previous work, such as the 2006 FATF Typologies study "The Misuse of Corporate Vehicles, including Trust and Company Service Providers" ; from analysis of jurisdictions' responses to a questionnaire developed for this project; as well as case studies obtained from various sources.

This report presents issues for consideration that should help to reduce the use of TCSPs for money laundering purposes.

21 October 2010

FATF: Money Laundering Using New Payment Methods

This report is builds on the 2006 Typologies report on New Payment Methods (NPMs). Since 2006, there has been a significant rise in the number of transactions and the volume of funds moving through NPMs. Consequently, the number of discovered cases where such payment systems were misused for ML/TF purposes has also increased.

This report compares the "potential risks" described in the 2006 report to the "actual risks" based on new case studies and typologies. The report also describes a number of indicators of suspicious activity. These red flag indicators will help NPM service providers and other financial institutions to detect ML/TF activities. The report describes the challenges presented in developing appropriate legislation and regulations for NPMs and the different approaches taken by national legislators and regulators.

The New Payment Methods report is the result of analysis of questionnaire responses and publications about NPMs as well as input by relevant private sector representatives such as NPM service providers, including the Internet payment sector, the mobile payment sector and prepaid card technology providers.

19 October 2010

BusinessAnnual 2011 with Offshore Guide

The Road to Recovery

Bank Negara Malaysia and Bank of Mauritius Signs MoU to Promote Mutual Co-Operation in Capacity Building

On 7 October 2010, Bank Negara Malaysia and Bank of Mauritius entered into a Memorandum of Understanding (MoU) to establish a collaborative framework aimed at enhancing mutual co-operation on capacity building and human capital development in the financial services industry, including in the area of Islamic financial services sector. The MoU was signed by Tan Sri Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia and H.E. Mr. Rundheersing Bheenick, Governor of Bank of Mauritius, during the IMF/World Bank Annual Meetings 2010 in Washington D.C.

In recognising the growth potential of Islamic finance and Malaysia's leading role as the centre for Islamic finance, this MoU will pave the way for both Malaysia and Mauritius to strengthen co-operation in the development of talent, expertise, business linkages and infrastructure support in Islamic finance.

18 October 2010

CIOs Are Change Agents for a More Collaborative, Virtual Workplace

Cognizant, a leading provider of consulting, technology, and business process outsourcing services, announced today the results of a research report, “Next-Generation CIOs: Change Agents for the Global Virtual Workplace.” The Economist Intelligence Unit conducted the research across Europe and North America and wrote the report, in cooperation with the Cognizant Business Consulting practice.

The report reveals the CIO’s role in restructuring how work is done throughout the organization. Among the more than 400 survey respondents, mostly CIO, CEO, vice president, and director-level, those who are moving toward more virtual, collaborative teams are benefitting from increased innovation, more effective talent recruitment and retention, and higher productivity. One in six said their companies are already seeing these results, and another one-fifth expect to garner benefits within a year.

Business leaders today are exploring new ways of working in response to disruptive industry changes – globalization, new collaborative methods and technologies, and a rising tech-savvy generation of employees and consumers. The virtualization of people, processes, and technologies is resulting in faster time to market while unleashing innovation,” said Malcolm Frank, Senior Vice President, Strategy, Cognizant.

Working with global knowledge-based companies, we witness first-hand how virtual teams are more likely to take hold when the CIO is engaged in the process. CIOs have the clout and the top-to-bottom perspective to enable business process change, weaving together collaborative business processes and platforms often based on cloud, social and mobile technologies to make work more productive and cost-effective,” said Mark Livingston, Senior Vice President, Cognizant Business Consulting.

The CIO should spearhead the transformation to a more virtualized workplace, according to 45 percent of respondents. Only CEOs ranked higher, with 47 percent, indicating the CIO is a strategic enabler who, alongside the CEO, can align IT capabilities with business needs.

Key findings include:
  • Virtual team structures are fostering more productive relationships with internal and external partners.
  • Organizations that have embraced virtual teams benefit from increased innovation and competitiveness, but often lack methods to measure the quantitative impact on the bottom line.
  • CIOs have a unique enterprise-wide perspective and are familiar with the people, tools, technologies, and techniques needed to create a corporate culture of virtual teams.
Download the research study:

Full report (registration required)


About the survey

A total of 402 respondents in Europe (52 percent) and North America (48 percent) participated in the survey, conducted by The Economist Intelligence Unit in May 2010. Forty-five percent of respondents hold C-suite or equivalent positions, and another 29 percent are senior vice presidents, vice presidents or directors. The remaining 26% are managers, department or business unit heads, and "other" titles.

Most of the organizations surveyed have global operations. Thirty-eight percent are small to medium-sized companies, with less than $500 million in annual revenue. Another 19 percent report $500 million to $5 billion in annual revenue, and 33 percent exceed $5 billion in annual revenue.

Forty-six percent of respondents have IT responsibility. The survey sought to explore differences in perspectives between IT and non-IT functions, but found considerable alignment between the two. Strategy and business development, and general management were the other main functional categories, with 13 percent in each. The remaining 28 percent fulfill a range of functions.

Mauritius Foreign Investment Dealers

FSC Rules made by the Financial Services Commission under Section 93 of the Financial Services Act 2007 and Sections 29(3) and 155 of the Securities Act 2005.

These Rules shall apply to the authorization of foreign investment dealers whose activities shall be restricted to trading on a securities exchange.

Application for authorization
  1. No foreign investment dealer shall deal on a securities exchange unless authorized by the Commission.
  2. A foreign investment dealer may carry out the functions and activities of an investment dealer if authorized by the Commission in accordance with these Rules.
  3. The Commission may authorize the applicant to act as an investment dealer if the Commission is satisfied that the applicant is exercising the functions of an investment dealer in a jurisdiction where there is a regulatory or supervisory framework consistent with international best practice.
  4. An application for authorization shall be accompanied by:
(a) a statement from the relevant securities exchange that the foreign investment dealer will be admitted to deal on the securities exchange if authorized by the Commission;
(b) a certified true copy of the agreement entered between the foreign investment dealer and the foreign investment dealer agent;
(c) a certified true copy of the business licence of the applicant;
(d) either a certificate of good standing from the relevant foreign regulatory body, if the applicant is licensed or a statement from a lawyer authorized to practise law in the foreign jurisdiction certifying that the applicant is legally entitled to carry out the functions of an investment dealer in that jurisdiction, if the applicant is not licensed;
(e) a certified true copy of the certificate of incorporation of the applicant;
(f) a list of the documents submitted by the applicant to the relevant securities exchange; and
(g) any other information that the Commission may deem necessary.

Mauritius PCC

A Protected Cell Company ("PCC") in Mauritius is a company having a special legal structure consisting of a core capital, cellular capital, cellular assets and liabilities, and core assets and liabilities, allowing legal segregation of assets attributable to each protected cell of the company whether owned by individuals or corporations, thus enabling ring-fencing among the various protected cells.

The constitutive documents must comply with the Protected Cell Companies Act (“PCC Act”). Similarly, the PCC operational documentation should disclose to contractual parties that it is a PCC and that claims shall be restricted to assets of the specific protected cell contracted with.

Pursuant to the PCC Act, a PCC may only undertake the following activities:

1. Asset Holding
2. Structured Finance Businesses
3. Collective Investment Schemes and Close-ended Funds
4. Specialised Collective Investment Schemes and Specialised Close-ended Funds
5. External Insurance Business

Mauritius Fund Management

A CIS Manager, licensed under Section 98 of the Securities Act 2005, may carry out any of the activities related to the management of a Collective Investment Scheme ("CIS" or "scheme"), including -
  1. all administrative services required by the scheme;
  2. provision of registrar and transfer facilities:
  3. distribution of the securities of the scheme;
  4. maintaining accounting records of the scheme;
  5. giving investment advice in relation to the scheme; and
  6. maintaining the portfolio of the scheme.

The activities under 3, 5 and 6 are subject to the CIS Manager and its officers meeting the relevant conditions and requirements under the Securities Act 2005, the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 or any relevant rules.

Licensing conditions for a CIS Manager

The FSC shall not grant a CIS manager licence to an applicant unless –

  1. the applicant is a body corporate;
  2. the FSC is satisfied that the applicant will be able, if licensed, to comply with the requirements of the FSC Rules as to the financial and other resources requirements needed by the investment manager for the collective investment scheme; and
  3. the applicant and each of its officers meet the requirements relating to eligibility, fit and proper, duties and obligations, rules of ethics and other such conditions as may be specified in FSC Rules.
Application for a Licence as CIS Manager

The person applying for a licence as a CIS Manager shall file the following information and documents with the FSC –
  1. Details of any other licence(s)/registration(s) which the Applicant holds and name of the licence(s) and issuing authority, and any restriction(s) imposed.
  2. Applicant to describe and demonstrate, with supporting documents or information, how it will satisfy its obligations under Part VIII of the Securities Act 2005, other relevant regulations/rules mentioned thereunder and the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.
  3. Undertakings Required where it is proposed to Invest in India: (i) An undertaking by the Applicant/Applicant’s Representative to the effect that the Applicant will not accept funds derived from sources within India from Indian Residents for investment purposes in the Applicant unless appropriate written approval from the relevant Indian Authorities have been obtained for such investment, and (ii) Undertaking by the person/entity responsible for conducting the AML-CFT on investors in the Company that he/she/it will ensure that no shares in the Applicant will be offered to/subscribed by Indian Residents which will be financed by funds derived from sources within India, unless appropriate written approval from the relevant Indian Authorities have been obtained for such investment.
  4. The applicant should submit evidence of the source of Capital/Fund to be contributed to the Company (whether proprietary, non-proprietary or others).
  5. The directors, shareholders and officers of the Applicant may be required to submit a morality certificate.

Mauritius Hedge Fund Administration

There is no dedicated hedge fund regulatory regime in Mauritius, hedge funds are structured and licensed as a Collective Investment Scheme or a Closed-end Fund.

A Collective Investment Scheme (“CIS”) is defined under the Securities Act 2005 (“SA 2005”) as a scheme approved by the Financial Services Commission (FSC) in Mauritius:
  • whose sole purpose is the collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets as may be approved by the FSC ;

  • whose operation is based on the principle of diversification of risk;

  • that has the obligation, on request of the holder of the securities, to redeem them at their net asset value, less commission or fees; and

  • where the participants do not have day to day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management.
  • includes closed-end funds whose shares or units are listed on a securities exchange; but

  • excludes such schemes as are specified in Part II of the Schedule SA 2005.

A Closed-end Fund means an arrangement or a scheme, other than a CIS, whose object is to invest funds, collected from investors through an offer or from sophisticated investors, in a portfolio of securities, or in other financial or non-financial assets, or real property.

A "Global scheme" is defined under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) as a company or any other legal entity approved by the FSC, holding a Category 1 Global Business Licence (GBL 1) and authorized to carry out activities falling within the definition of a Collective Investment Scheme.

Conditions applicable to Global schemes

The FSC may grant an authorisation for a Global scheme provided that:

  1. information relating to the CIS Manager and the custodian as prescribed in the Regulations is submitted with the application for authorisation;

  2. a CIS administrator [e.g. OCRA (Mauritius) Limited] with a place of business in Mauritius is appointed;

  3. the accounting and reporting services are carried out by the CIS Manager, or the CIS Administrator of the scheme, having a place of business in Mauritius.

  4. The prospectus or other offering document contains the following statements in a prominent position:

    "Investors in [name of the Global scheme] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  5. a certified copy of the prospectus or other offering document filed in a jurisdiction where the collective investment scheme is regulated or exempted from regulation is filed with the FSC;

  6. information is provided on the CIS Manager and the custodian, including name and registered addresses and where regulated, if applicable;

  7. information is given on whether the collective investment scheme is regulated, or shall be subject to regulation, in any jurisdiction and if so, a copy of the authorisation or similar consent of the regulator and if not, indication on what basis it is exempted from securities regulation in other jurisdictions;

  8. adequate measures are taken to prevent money laundering and financing of terrorism and provided that the FSC is satisfied that these measures meet legislative requirements.
An authorisation under section 97(5) SA 2005 may be granted subject to such terms and conditions the FSC considers necessary or desirable for the protection of participants.

Subject to FSC approval, a Global scheme may appoint and retain a CIS Manager and/or a custodian established in a foreign jurisdiction.

An “Expert Fund” is defined as a fund which is only available to expert investors. A Collective Investment Scheme (“CIS”) may apply to the Financial Services Commission (“FSC”) under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (“Regulations”) for authorisation as an expert fund.

Such application must include the following documents / information:
  • constitutive document of the scheme;
  • measures taken to prevent money laundering and financing of terrorism;
  • latest audited financial statements;
  • a copy of the offering document given to potential investors; and
  • if applicable, information on the CIS manager as requested in regulation 6.
Conditions applicable to an Expert Fund
  1. An expert fund shall only be available to expert investors.
  2. An expert fund may appoint a manager who, where appointed, shall be the holder of:

    (a) a CIS manager licence; or

    (b) a licence issued by a regulatory body in a jurisdiction having comparable regulation as Mauritius for investor protection (e.g. FSA in UK or SEC in US)

  3. The CIS manager of an expert fund need not be resident in Mauritius.
  4. The Board of the fund or the CIS manager where appointed must satisfy itself that the fund is and continues to be managed in accordance with the fund’s constitutive documents.
  5. The Board of the fund, or the CIS manager where appointed, shall be responsible for ensuring that the provisions of these Regulations applicable to expert funds are complied with.
  6. The expert fund shall accept as investors in the fund, only such persons as the Board or CIS manager where appointed is satisfied are expert investors.
  7. The offering document or any other similar document of an expert fund shall:

    (a) contain a statement to the effect that the expert fund shall be available only to expert investors,

    (b) contain in a prominent position, the definition of an expert investor; and

    (c) shall have the following statements in a prominent position -

    "Investors in [name of the expert fund] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

    "The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."

  8. In accordance with section 30 of the Financial Services Act 2007 the audited accounts of the expert fund shall be filed by the scheme, the CIS manager or the CIS Administrator as appropriate.
Expert Investor

An “expert investor” means-

(i) an investor who makes an initial investment, for his own account, of no less than US$ 100 000; or

(ii) a sophisticated investor as defined in the Securities Act 2005 or any similarly defined investor in any other securities legislation (e.g. an accredited investor under US federal securities laws)

Exemptions for an Expert Fund

An expert fund, subject to authorisation from the FSC, shall be exempt from the provisions of the Regulations except for regulations 78 to 81 and Part I and XII.

Prime Minister Launches Global Board of Trade in Mauritius

The setting up of the Global Board of Trade (GBOT) in the Mauritian financial landscape is a major leap forward and the exchange firmly establishes the island as a strategic business and financial gateway between Asia and South Africa, said the Prime Minister Dr Navinchandra Ramgoolam, at the official launching of GBOT on Friday last at the InterContinental Hotel in Balaclava.

Dr Ramgoolam further stated that the establishment of GBOT will add depth to the domestic financial markets and bring entirely new dimensions to financial services systems by providing knowledge, technology and business knowhow to the country. He also underlined that GBOT offers an ideal platform for global investors to access many of the world's fastest growing economies from Mauritius while expanding the financial sector which is the most productive sector in Mauritius.

The Prime Minister welcomed the currency derivatives segment as part of GBOT as according to him this will offer possibility to hedge in fluctuations on exchange rates, particularly for both importers and exporters and other companies. Commenting on the Foreign Direct Investment (FDI) from India, Dr Ramgoolam added that from 2006 to date investment flows have reached Rs 5.7 billion and for 2010, some Rs 2.8 billion of investments have so far been registered, a situation he qualified very encouraging.

GBOT which is already operational at Ebène invested some 50 million US dollars in the project in the first instance and the company is planning to invest a further 50 million US dollars. GBOT is the first international multi-asset class exchange from Mauritius to offer a basket of commodity derivative products including metals, energy, agri- soft, as well as currency derivatives. The exchange will boost an efficient clearing and settlement systems to ensure counterparty guarantee for all trades.

GBOT will offer commodity as well as currency derivatives products on its state-of-the-art electronic exchange platform with efficient clearing and settlement systems.

Mauritius: Capacity Development Workshop on Tax Administration

The African Tax Administration Forum (ATAF), in collaboration with the Mauritius Revenue Authority (MRA), held from 11 to 15 October the 11th ATAF Technical Workshop on “Auditing Multinational Enterprises”, at Le Maritim Hotel, Balaclava.

Participants comprised mainly tax administrators from the thirty six African countries which form part of ATAF. The workshop aimed at bringing together tax agencies in Africa and give them the opportunity to discuss on ways to improve on their performance strategies as regards tax administration system in their respective countries.

ATAF grants a lot of importance to the capacity development for African Tax Administrations given that during the launching of ATAF in Kampala, Uganda in November 2009, it was agreed among the different stakeholders that taxation is central to Africa’s development agenda. Besides, the building of effective and efficient tax systems across Africa is vital to meet the development responsibilities of the people in a sustainable manner.

ATAF was established as core objective to cater for the development and maintenance of efficient and effective administration within the context of taxation and technical workshops and international dialogue remain the core part of ATAF’s programme of capacity development. In addition to playing its role as the central platform for African tax administrators to articulate African tax priorities, the forum aimed at developing and sharing best practices in the region and building capacity in African tax policy and administration through peer learning and knowledge development.

It will be recalled that the holding of the workshop lies in the context of a series of training initiatives on which the MRA has embarked to enhance the skills of its employees with a view to providing a better service to clients and to stakeholders in general.

Taxation and the Financial Services Sector in the UK: Predictability and Competitiveness

Taxation of the Financial Services Industry: Predictability and Competitiveness’ assesses the way in which the predictability and competitiveness of the UK tax regime impacts upon the financial services industry. The City of London-commissioned report was produced by Charles River Associates, and uses both quantitative and qualitative analysis based on interviews with senior stakeholders. The report also contains a comprehensive set of recommendations to help shape the debate on supporting a competitive tax regime.

15 October 2010

Mauritius Private Foundation

To nurture the dynamism of the financial services industry, Government will pass an innovative and competitive law on Private Foundation. This will allow the setting up of foundations in the Global Business Sector to further promote Mauritius as a platform for wealth management, services, succession and estate planning as well as pension funds.


The Financial Services Commission (FSC) will seek recognition as an equivalent jurisdiction with other financial centres. This will expand the scope for the Mauritian financial industry to market its products internationally.

Government is also undertaking a study on the appropriate fiscal regime to improve the competitiveness of Mauritius as a business centre for Funds whilst staying in line with responsible international norms.


The Foundations Bill