30 April 2013

IFC Review - FATCA: Implications for Trusts and Trustees

Jay Krause and Theodore Ahlgren examine the implications of FATCA regulations, which will affect virtually all non-US trust companies and many family trusts and investment vehicles.

IFC Review - Due Diligence: Investigating the Investor

In his latest column, L Burke Files discusses the process of due diligence investigations and explains why it is so important to do your due diligence on investors prior to disclosing information.

IFC Review - The Regulatory Hydra: Larger Scale Issues for Asian PWM in the Year of the Snake

Alan Ewins discusses the ever growing list of regulatory changes to the financial services industry in Hong Kong, and pieces together the key issues effecting Asian finance centres.

IFC Review - QROPS: A Jurisdictional Comparison

A year on since the 2012 UK budget put many providers out of the market, Rex Crowley examines the many variations of QROPS still available and provides a jurisdictional comparision.

IFC Review - Gibraltar: A Rival to Any IFC

Richard Buttigieg and Danielle Villa examine Gibraltar’s dedication to improving its already stellar reputation, by updating its legislative framework whilst also enhancing its robust network of tax treaties. 

IFC Review : The Latin Landscape and its Moral Compass

Derek Sambrook discusses the economic growth prospects of Latin America and the issue of moral dealings, in what could be an eventful year for the world’s fourth largest continent.

EDHEC - Risk Institute : Official opening of scientificbeta.com, the first multi-strategy platform for smart beta investing


As of April 22, 2013, EDHEC-Risk Institute has inaugurated its new smart beta index design and production activity, ERI Scientific Beta. This activity aims to revolutionise the index world through, firstly, a new approach to smart beta investing called Smart Beta 2.0, which enables investors to choose and control the risks of these new benchmarks, and secondly, total transparency on the methodologies and compositions of the indices available on the platform.

The Smart Beta 2.0 approach was summarised by Noël Amenc, CEO of ERI Scientific Beta, in an article in the Financial Times in February, which can be downloaded here. The full ERI Scientific Beta publication Smart Beta 2.0, can be downloaded here

From April 22, ERI Scientific Beta has been offering 30 flagship indices free of charge on its www.scientificbeta.com platform. This new offer has been highlighted in separate articles in the Financial Times in March and April, both of which can be downloaded by clicking on the respective month.

ERI Scientific Beta also offers very sophisticated risk management functions for smart beta indices, whether it involves absolute or relative risks. Scientific Beta enables investors to construct their own benchmark online by taking account of the various risk selection and control criteria offered by the platform. This functionality is part of the Smart Beta 2.0 approach to genuine risk management for smart beta promoted by EDHEC-Risk Institute. Ultimately, the Smart Beta 2.0 approach available since April 22, 2013, will provide investors with a choice of 2,442 customised indices.


29 April 2013

Jersey : Government, Industry and Regulator to Act Together in Response to Research Findings


States Members and senior representatives of the Finance Industry have been briefed Friday (April 26) on the findings of a detailed and comprehensive research project undertaken to consider the future direction of Jersey’s Finance Industry.

The Finance Industry Strategic Jurisdictional Review was conducted by Jersey Finance in association with McKinsey and has formulated a plan designed to sustain the success of the Industry for the benefit of the economy as a whole and all Island residents for the long term.

More than 100 Jersey firms and organisations representing government, the financial regulator and all sectors of the finance industry were involved in the consultation process as part of the research. Some 40 in depth interviews were undertaken with key figures who introduce business to Jersey from around the world and the views of a further 25 senior finance industry experts were sought about the future shape of the international financial services industry. There were also 30 workshops to assist with the strategic thinking.

Following the completion of the research, the next step has been the formation of a steering committee on which Government, the Industry and the Regulator are all represented, and which will oversee the entire effort and recommend to the Chief Minister what decisions are required to maintain progress and deliver the agreed key initiatives.

Chief Minister Senator Ian Gorst commented:

Government greatly appreciates the efforts of the research team and the stakeholders who gave so much of their time to this vital project. Government is fully committed to the future of Jersey as a successful international finance centre and is determined that the initiatives agreed will be executed both speedily and effectively. The contribution the finance industry makes to government revenues, personal incomes and employment levels is of such importance that we cannot leave its future success to chance.

One of the key findings from the research is the importance of clear lines of government responsibility for financial services. We have moved on this already and as I told the States on 16th April the Council of Ministers has endorsed the transfer of political responsibility for the financial services industry to the Chief Minister, and the Minister of Treasury and Resources has been asked to assist by taking on many of the operational tasks involved in putting the initiatives quickly into effect.

The findings are wide ranging across each sector of the finance industry. Amongst the broad conclusions are that:

  • cross border investment flows will accelerate 
  • tax regimes will not be harmonised and competition between jurisdictions will remain 
  • wealth accumulation will increase rapidly particularly in emerging markets while political instability will remain an important factor in investment decisions

Joe Moynihan, Director of Financial Services, States of Jersey, commented:

There is much to absorb and learn from this detailed analysis which has concluded that there is a strong long-term future for International Financial Centres, which will continue to prosper if they successfully tap into cross border investment flows as they develop and from the wealth creators in those target markets.

Geoff Cook, CEO Jersey Finance, added:

The research has highlighted that there is no ‘magic bullet’ for instant success but it has pinpointed the value of protecting and nurturing what we have already from the threat of competitive challenges as the key priority and this should be placed ahead of moving into new sectors, to ensure the long-term prosperity of Jersey’s finance industry.

One of the key findings from the research is the importance of the private sector being primarily responsible for innovation within the industry, whilst the Government and regulator work to foster the commercial environment in which innovation can flourish. It is encouraging that both Government and the regulator have already signed up to this concept and we look forward to working with their representatives in the steering group to implement the recommendations contained in the analysis.

John Harris, Director General of the Jersey Financial Services Commission, also commented: ‘The JFSC shares the view expressed by the research team that the future success of Jersey as a reputable international finance centre, recognised as such internationally, will be greatly assisted if the three stakeholders – government, regulator and industry – work closely together to a common purpose. The Commission is committed to playing a full part in this.

28 April 2013

Mauritius: Expert Fund


Mauritius has earned a reputation as one of the most attractive jurisdictions wherein to establish an offshore fund. The country ranks amongst the most flexible and advantageous regional fund domiciles due in no small part to the wide gamut of funds such as the Expert Fund that may be established under the legal and regulatory system of Mauritius.

The Expert Fund regime was introduced in Mauritius with the promulgation of the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008. These Regulations, implemented a framework for the establishment and operation of collective investment schemes including Global Schemes and Expert Funds, built upon the regime put in place by the Securities Act 2005.

The Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 define an “expert investor” as either an investor who makes an initial investment, for his own account, of no less than US$ 100 000; or 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)

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."

High regulatory standards – combined with the flexibility of a small jurisdiction and the availability of highly-skilled professionals along with quality infrastructure at reasonable cost – have made Mauritius an increasingly attractive funds location in the region. Another attraction has been the fact that Mauritius has international accountancy firms such as Deloitte, Ernst & Young, KPMG and PwC to provide audit and other ancillary services; leading international banks such as Bayclays, HSBC and Standard Chartered to provide custody services; and multi-jurisdictional offshore law firms such as Appleby, Bedell Cristin and Conyers Dill & Pearman to provide legal services.

An Expert Fund must be administered by a Mauritius-based CIS Administrator, its directors are required to be pre-approved by the Financial Services Commission, and it must have a custodian. Expert funds must also prepare  and file annual audited accounts.

An Expert Fund may also be structured as a Protected Cell Company under the Protected Cell Companies Act 1999 to segregate assets and liabilities in different cells in an umbrella structure with a number of sub-funds.

The Securities Act 2005, and the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 have provided continued impetus to the funds industry and positioned Mauritius as the regional domicile of choice for regulated funds.

26 April 2013

Mauritius: FSC Q & A on Scams and Swindles (incl. Ponzi)

Q&A
Scams and Swindles (incl. Ponzi)

This Q&A aims at sharing the answers to questions received at the FSC from the public.

What do scams and swindles mean?

A Scam is a fraudulent business scheme whereas Swindle aims at defrauding people.

If you come across a scam please contact the police immediately. If you need assistance or more information, please contact the FSC.

The FSC is committed to protect consumers of financial services and products and investigates all complaints on its licensees, activities which have the appearance of financial services and any matters which can affect the good repute of Mauritius as a sound and reputable international financial centre.

What is a Ponzi scheme?

A Ponzi scheme is an illegal activity where returns are paid to its 'investors' out of their own money or out of the money paid in by subsequent 'investors' rather than from genuine returns / profits earned from investments.

Ponzi schemes usually offer abnormally higher returns within a short period of time, than any legitimate activity could possibly sustain to lure investors. Ponzi schemes inevitably collapse since they are inherently insolvent as soon as they start. A Ponzi scheme survives as long as new money keeps pouring in, and the moment the cycle stops, it collapses.

How does the FSC address scams such as Ponzi schemes?

A Ponzi scheme is a fraudulent and criminal activity for which no license exists. 

The FSC takes actions against Ponzi schemes as soon as the FSC becomes aware of it. Section 44 of the Financial Services Act 2007 (FSA) provides the Commission with the powers to conduct investigations into the business of the entity allegedly carrying out/involved in the Ponzi schemes. 

How does the FSC use its powers of investigation under Section 44 of the FSA in the case of such unregulated activities?

The FSC applies internationally recognised best practice and abides by the principles of natural justice.

The FSC does not use its powers under Section 44 in an arbitrary manner.
  • There is a clear procedure to follow as provided for in our legal framework. The FSC will start by initiating an information gathering exercise to ascertain the nature of the activity before coming to any views, adverse or otherwise. It will conduct an investigation to obtain concrete evidence where and when necessary.
  • It is a criminal offence to conduct financial services activities without a licence.
  • When the offence is of a criminal nature, the matter together with all the evidence collected is referred to the DPP/Police for any further investigation and prosecution.
When can the FSC go to court directly or apply to a Judge in Chambers?

Under Section 91 of the Financial Services Act 2007 (FSA), the FSC may institute proceedings against any person in respect of any offence under the relevant Acts. However, criminal proceedings are under the purview of the DPP and as such the FSC works in close collaboration with the Police and DPP for greater effectiveness.

It is to be noted that in case the FSC has reasonable grounds to suspect that a person is committing an offence under the relevant Acts or is involved in a financial crime, and the freezing of the assets of that person is deemed appropriate, the FSC will make the necessary application to the Judge in Chambers.

What has the FSC done about the Sunkai and Whitedot cases?

Given that Section 6(d) of the FSA, states that one of the FSC’s functions is to:

 “(d) identify and take measures to prevent and eliminate investment business abuse”,

as soon as it came to the FSC’s attention that these entities (Sunkai and Whitedot) have been offering abnormally high-yield investments, the FSC set up teams to look into the operations and activities of the companies.

FSC conducted its information gathering exercise from internal sources and other enforcement agencies.

The FSC exercised its powers under Section 42 of the FSA to request information from the companies.

(i) Sunkai

Following analysis of all information obtained, FSC conducted investigations at the premises of the company. Information received was analysed and shared with other enforcement agencies, including the Police and DPP.

(ii) Whitedot

Following analysis of all information obtained, an investigation on the premises of the company was scheduled but had to be put on hold following the CCID’s intervention and arrest of the Directors.

The FSC is assisting the CCID with its investigation.

Does the FSC have an Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) Code?

In 2003, the FSC issued Codes on the Prevention of Money Laundering and Terrorist Financing intended for the three sectors under its purview, (i) Management Companies for the Global Business sector (ii) Insurance Entities and (iii) Investment Business.

These codes were revised in 2005. The codes were consolidated and updated with the new FATF principles and the recommendations of IMF FSAP ROSC Report (2007). The code which is applicable to all licensees of the FSC was issued in March 2012 and came into force on 01 April 2012. The FSC conducted training courses on the new code for the industry.

How does the FSC assess its procedures and processes?

The FSC is a member of international standards setting bodies namely the International Organisation of Securities Commission (IOSCO), the International Association of Insurance Supervisors (IAIS) and the International Organisation of Pension Supervisors (IOPS). Keeping abreast of and meeting international standards and norms have become a necessity for regulators. The FSC continuously adheres to these international norms and standards to foster transparency, market efficiency, and the effectiveness of its supervision.

How does the FSC collaborate with other regulators around the world?

The FSC has signed Memorandums of Understanding (MOUs) with its international counterpart Regulators for exchange of information and enhanced capacity building.

The FSC is also a signatory of the IOSCO MMOU since May 2012, which enables the Commission to reinforce collaboration and exchange information with other securities regulators on the IOSCO Appendix A list.

What would you advise a person to do if he is a victim of a scam?

If you have been the victim of a scam or you believe you have been contacted by perpetrators of scams, there are steps you can take to protect yourself:

Step 1: Report the scam to the police immediately.

The police has the power to stop and arrest any person indulging in a fraudulent/criminal activity.

Step 2: Stop giving money

You should stop giving money to the company or individuals involved.

If you have given them your bank account details, inform your bank immediately.

Step 3: If you need more information, contact us on 4037000

Please provide as much information as you can about what has happened, including the company or person involved, their contact details and submit copies of any documents related to the transaction.

Step 4: Beware of ongoing or new scams

The people running scams are skilled, experienced and have persuasive skills that can easily convince you to part with your money. You should refuse to listen to their arguments and report them to the police immediately.

Step 5: Protect yourself from being scammed again

Verify that the company or the individual is duly registered with either the FSC or the BOM. If you still have doubts, contact the Regulators.

It is worth bearing in mind that authorised companies are unlikely to contact you out of the blue with abnormally high yield offers.

Financial Services Commission
26 April 2013


Mauritius: The Financial Services Commission set to sign MoU with European Authorities under the AIFMD


The transposition of the Alternative Investment Fund Managers’ Directive “AIFMD” into national laws by EU Member States remains on course for the 22nd of July 2013. In order to permit the activity of Mauritius fund managers in the EU and the offering of Mauritius funds to European investors after this date, the AIFMD requires the existence of adequate supervisory cooperation arrangements (in the form of a MoU) between the Financial Services Commission of Mauritius “FSC” and the EU authorities – to be coordinated by the European Securities and Markets Authority “ESMA”.

Since approached by ESMA last year to consult on the provisions of this MoU, the FSC has been working closely with the former. The FSC is pleased to announce that the negotiation process is now over and that the Final Text MoU for Mauritius has been finalized.

In terms of the next steps, the Final Text MoU for Mauritius will now be submitted by ESMA for approval by the EU authorities at their next Investment Management Standing Committee to be held on 30 April 2013. The official signing process will take place on 22 May 2013 in Dublin at the occasion of the meeting of the Board of Supervisors of ESMA.

With the signing of this MoU, Mauritius will have satisfied all the conditions under the AIFMD for Mauritius-regulated funds to continue to market in Europe under the private placement regimes of EU Member States after 22 July 2013 (subject to meeting any additional requirement that may be imposed by the EU Member States). Furthermore, by putting this MoU in place well before the deadline, the FSC is hoping that the local industry will now benefit from the longer time span available to complete the administrative requirements vis-à-vis the EU Member States.

Such administrative requirements will entail managers of Mauritius-regulated funds to, first of all, contact the EU regulator(s) where they intend to market their funds to find out if there are any additional conditions to satisfy - the determination of the conditions applicable to non-EU fund managers under the private placement regime (beyond those established in the AIFMD) are left to the discretion of each Member State of the EU. Secondly, Mauritius funds will be required to seek an authorisation from each EU Member State where marketing will be done – the authorisation/notification process may vary among the different EU Member States.  Non-EU funds will need to be duly authorised prior to start or continue of marketing in the EU, after 22 July 2013.

25 April 2013

Guernsey Funds Forum 2013 approaches


There is just a week to go until this year's Guernsey Funds Forum in London.

The event, which will examine the future shape of the global funds industry, will be held at the Grange St Paul's Hotel on Thursday 2 May. It will culminate in a keynote debate featuring industry experts Nigel Vooght, PwC's Global Financial Services Leader and head of its future-focused initiative ' Project Blue'; and Better Capital Founder and Chairman, Jon Moulton. The debate and the preceding panel sessions will be moderated by ITV News Anchor, Alastair Stewart.

The latest speakers to be confirmed for the event are Eric Warner, Partner and Head of Investor Relations at Altius Associates, and Brian Forrester, Partner in the Investment Management and Private Equity Group of Deloitte's London office.

Mr Warner will be part of the Forum's first panel session, 'Investor relations and influence'. He will be joining Darren Winder, Head of Economics and Strategy at Oriel Securities; John Daghlian, Partner at O'Melveny & Myers; and Adam Turtle, Partner at Rede Partners. They will examine how managers need to keep pace with the evolving investor mindset, the key risks for investors and the changing factors in successful fundraising. 

Mr Forrester will be providing his insight on the event's second panel debate, 'Regulation - the bigger picture', which will look at how regulation will affect the investor landscape, how adopting successful strategies can help deal with new regulation and who will bear the cost of state-directed capitalism. Panellists already confirmed for this session comprise Tim Hames, Director General at the British Private Equity & Venture Capital Association (BVCA); Carl Rosumek, Director of Investment Business at the Guernsey Financial Services Commission (GFSC); and Nigel Farr, Partner at Herbert Smith Freehills.

Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "We have once again attracted a great line-up of speakers for the Guernsey Funds Forum and I'm sure they will provide an insightful debate that will be relevant to the audience. In particular, Nigel Vooght and Jon Moulton's debate on the future of the global funds industry promises to be a fascinating conclusion to the day."

As well as the conference, there will also be an exhibition of Guernsey service providers, including the Island's leading fund administrators, custodians, multi-jurisdictional legal practices and global accountancy firms.

"Our exhibition packages sold out in record time this year and I think that is testament to how the Guernsey Funds Forum has developed year on year and become a must-attend event for many of the key investment fund decision makers in London. We are always looking at ways to enhance the event and this year will be no different as we will be providing every delegate with a handheld interactive voting system so that they can voice their opinions on the major issues of each session," said Miss Le Poidevin.

Hosted by Guernsey Finance in conjunction with the Guernsey Investment Fund Association (GIFA) the Guernsey Funds Forum 2013, titled 'Back to the Future', takes place from 1pm, starting with registration and lunch and concluding with a networking drinks reception at 5.45pm. The event is supported this year by the BVCA, Global Custodian, HFM Week and Limited Partner Magazine.

OECD reports new developments in tax information exchange


OECD Secretary-General Angel Gurría has presented a report to G20 Finance Ministers and Central Bank Governors that highlights measures to ensure that all taxpayers pay their fair share.

The report covers three strategic initiatives:

  • Progress reported by the Global Forum on Transparency and Exchange of Information for Tax Purposes including the upcoming ratings of jurisdictions’ compliance with the Global Forum’s standards on exchange of information on request;
  • Efforts by OECD to strengthen automatic exchange of information;
  • Latest developments to address tax base erosion and profit shifting, a practice that can give multinational corporations an unfair tax advantage over domestic companies and citizens. 

Global Forum on Transparency and Exchange of Information for Tax Purposes: How do countries rate

The Global Forum, set up in 2000 to agree global tax standards, now has 119 member countries and jurisdictions. Since 2009, when the G20 called for effective implementation of the internationally agreed standard of information exchange, the Forum has published 100 peer review reports. Most countries have completed the first phase of the reviews which looks at legal frameworks. Fourteen are not moving to the second phase due to deficiencies in their legal frameworks. After it completes a set of Phase 2 reviews, looking at effectiveness of the information exchange practices, the Global Forum will start rating countries’  implementation of the standards on the basis of a four-tier classification system: "compliant,”  “largely compliant,” “partially compliant” and “non-compliant”. The results of the ratings exercise for the first set of reviews will be completed by year end, with the allocation of overall ratings to approximately 50 tax jurisdictions.

Commending the Global Forum’s achievements, Mr. Gurría  noted that, “Now that the tools exist to investigate cross-border tax evasion, all countries must use them to the full. ” 

Automatic Exchange of Information: the next step

Commenting on new OECD work to  develop a common model for automatic exchange of bank information, Secretary-General Gurria said:   “The political support for automatic exchange of information on investment income has never been greater.  Luxembourg has changed its position and the US FATCA legislation is triggering rapid acceptance of automatic exchange and propelling European countries to adopt this approach amongst themselves.  In response to the G20 mandate to make automatic exchange or information the new standard, the OECD is developing a standardised, secure and effective system of automatic exchange.” 

The report identifies the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as the ideal legal instrument for multilateralising automatic exchange of information. The Convention provides governments with a variety of means to fight offshore tax evasion and ensure compliance with national tax laws, while respecting the rights of taxpayers. Over 50 countries have either signed or committed to sign; more are expected to sign the Convention at a ceremony to be held at OECD headquarters on 29 May.

Addressing Base Erosion and Profit Shifting

As Base Erosion and Profit Shifting undermine tax revenues and the fairness of the tax system, the OECD has strengthened its work to put an end to international double non-taxation. The report also provides an update on the OECD’s work on Base Erosion and Profit Shifting noting that an Action Plan will be delivered to the Moscow meeting of G20 Finance Ministers meeting in July 2013.

CISX Milestone Welcomed by Jersey Finance


Jersey Finance has welcomed news that the Channel Islands Stock Exchange has achieved its milestone of 5000 securities on its Official List.

Geoff Cook, CEO at Jersey Finance, commented:

The work of the CISX is an important element of the Jersey Finance Industry and helps to illustrate the Industry’s breadth and diversity. The Exchange continues to be successful in developing niche markets which complement the leading sectors of our Industry and it is encouraging that in addition to reaching this latest milestone, the Exchange is reporting its busiest quarter to date, a positive sign of a further uptake in business in these specialist markets which is welcome for the Industry in Jersey as a whole.

The 5000th listing was a special purpose vehicle for a specialist real estate debt provider.

IoM FSC: Fiduciary visit feedback and PLC questionnaire


The Isle of Man Financial Supervision Commission has published its latest feedback to licenceholders, in the form of a briefing to corporate and trust service providers on the findings of visits conducted during financial year 2012/13 and a summary of the results of its questionnaire about services provided to public companies. The feedback concentrates on matters where issues arose; some of these issues may have arisen in only a small number of cases, but highlighting them to the industry as a whole is seen as a valuable exercise in raising awareness and maintaining high standards.

The briefing document can be found here

24 April 2013

Singapore - Legal Profession – Admission: Re Caplan Jonathan Michael QC

This application was made pursuant to s 15 of the Legal Profession Act (Cap 161, 2009 Rev Ed) (hereinafter referred to as “the current LPA” to distinguish it from its predecessor versions) for Mr Jonathan Michael Caplan QC (“Mr Caplan QC”) to be admitted as an advocate and solicitor of Singapore for the purpose of representing one Chew Eng Han (“the Accused”) as his defence counsel in District Arrest Cases Nos 023158 to 023167 of 2012, including any appeals therefrom (“the Criminal Proceedings”). The application was opposed by the Public Prosecutor (“the PP”), the Attorney-General (“the AG”) and The Law Society of Singapore (“the LSS”). After hearing the parties’ submissions, I dismissed the application and gave brief oral grounds for my decision. I now set out my full grounds.

Jersey Foundations break through 200 milestone and reflect Jersey’s expertise as a centre for philanthropy


The number of Foundation structures registered in Jersey has broken through the 200 barrier, fewer than four years since their introduction.

Over 200 Foundations have now been registered with the Jersey Financial Services Commission Registry since 17 July 2009, when Jersey’s Foundations Law came into force. Jersey was the first British Crown Dependency to offer such structures and it has seen a steady stream of registrations since enactment.

It is understood that around one third of the Foundations formed are being used for philanthropic or charitable purposes, with a further third being used specifically by ultra-high-net-worth families as part of their family wealth management and dynastic planning strategies. Foundations are also being used for commercial purposes and for holding high value or luxury assets.

Jersey Foundations are proving particularly popular in civil law jurisdictions, where the common-law concept of the trust is less familiar. As well as a strong uptake in continental Europe, including Switzerland and the Netherlands, there have been high levels of interest from Asia, including the Far and Middle East, with a number of Foundations being used for Sharia’h-compliant financing arrangements.

Geoff Cook, CEO, Jersey Finance, said:

It is encouraging that, almost four years since their introduction, Jersey Foundations have established themselves as mainstream vehicles within global wealth management strategies. Their long-term appeal is also proving hugely valuable as Jersey builds relationships with key markets in Asia, thanks both to their flexibility and control structures. The consistent growth both in terms of bare numbers but also in terms of the levels of funds being placed into Foundations reflects the success of Jersey’s Foundations Law and reinforces again Jersey’s position as a centre of excellence for private wealth management business.

Giles Corbin, Partner at law firm Mourant Ozannes and a leading practitioner on Jersey Foundations, added:

The growth in Foundations being used for philanthropic purposes demonstrates Jersey’s position as a leading offshore centre for this type of activity. In addition, while the majority of Jersey Foundations have been new structures, a number have been migrated from other jurisdictions, providing more evidence of Jersey’s attraction as a flexible jurisdiction with high standards of regulation and governance.

The success of Jersey’s Foundations and their growing use to facilitate philanthropic objectives will form part of the debate at this year’s Jersey Finance Private Client Conference, to be held at the British Museum in London on 14th May.

Mauritius: Africa Training Institute to be Operational in June 2013


The Africa Training Institute set up by the International Monetary Fund (IMF) in collaboration with the Government of Mauritius for the training of officials across the sub-Saharan African countries will be operational in June 2013 in Mauritius.

A Memorandum of Understanding (MoU) was signed on April 19 in Washington between Mauritius and the IMF. The document specifies the contribution that Mauritius will be providing with regards to the costs of accommodation and training of over 200 officials per year through two-week courses as well as housing and the provision of equipment for the Institute.

The Institute has also received technical support and financial assistance from the Australian Agency for International Development and the Chinese authorities. It will offer courses and seminars for officials from Central Banks, Ministries of Finance and other Government agencies from across sub-Saharan Africa.

Training modules will cover macroeconomic policymaking and financial programming, public finance, exchange rate and monetary policies, economic integration, and financial sector issues, including banking supervision. The training will complement the activities of the IMF's Regional Technical Assistance Centres in Africa (AFRITACs) and other regional initiatives. In addition, the Centre will seek to host training by other international and regional organisations in their respective areas of expertise thereby expanding the range of courses and seminars offered.

Through these courses the Institute will help the IMF address existing training gaps and help in meeting the large demand for IMF training from sub-Saharan Africa while bringing the region’s training volume at par with those of other regions. The new Centre will also close a longstanding gap, as Africa had no IMF training centre despite considerable training needs.
In his remarks during the signing of the MoU, the Deputy Managing Director of the IMF, Mr Nemat Shafik, underlined that Mauritius is one of the leading middle-income countries in the world that partner with the IMF to support capacity development activities. Mr Shafik added that with its financial support for AFRITAC South and the Africa Training Institute, the Government of Mauritius clearly demonstrates its vision of becoming a knowledge hub for Africa.

Presently Mauritius already hosts the Regional Technical Assistance Centre for Southern Africa, AFRITAC South, which is operational since June 2011 and which offers capacity building services to some 13 countries across Southern Africa and the Indian Ocean. The areas covered by the Centre include: financial sector supervision, monetary policy and operations, tax and customs administration, public financial management, and macroeconomic statistics.

22 April 2013

Visit of Jersey government and business delegation will strengthen and broaden ties with UAE


A delegation from Jersey, led by its Chief Minister and including senior government and industry figures, is visiting the UAE this week to strengthen and broaden its relationships with the country and the wider region.

During the visit between 20th and 23rd April, government authorities, including Jersey’s Chief Minister Senator Ian Gorst, representatives of Jersey’s business community and Jersey Finance, the organisation that represents Jersey’s finance industry, will meet with a range of senior government officials and business leaders in Dubai and Abu Dhabi to discuss a wide range of issues, including financial services, international development, renewable energy and education.

Richard Corrigan, Global Head of Business Development for Jersey Finance, and Sean Costello, Chief Representative Officer for Jersey Finance in the GCC and India, will also be seeking to galvanise the existing relationships Jersey’s finance industry has in the UAE through meetings with firms in the UAE that also have offices in Jersey and a number of leading banks that have a significant interest in Jersey, including HSBC, Abu Dhabi Commercial Bank (ADCB) and National Bank of Abu Dhabi (NBAD).

Jersey Finance is also sponsoring the Queen’s Birthday Party celebrations at the UK Embassy in Abu Dhabi for the third consecutive year, and will host a dinner for the Jersey Advisory Group, a group of senior UAE-based individuals who provide insight and guidance on Jersey’s business development efforts in the UAE. Additionally, Richard Corrigan and Sean Costello of Jersey Finance will present to the Emirates Institute for Banking and Financial Studies with Trevor Norman of Jersey trust company Volaw, on Private Wealth Structures concentrating on the Shariah compliance of Trusts and Foundations.

The visit comes shortly after the second anniversary of the opening of Jersey Finance’s office in Abu Dhabi and builds on a busy programme of activity for Jersey in the region. Financial services links between Jersey and the UAE remain strong, with bank deposits held in Jersey emanating from the Middle East representing over 13% of the £152.1 billion total. In addition, ADCB became a full branch in Jersey and the National Bank of Abu Dhabi launched the first UAE expat pension scheme through NBAD Trust Co Jersey Ltd in 2013.
Senator Gorst said: “There are well-established political and commercial links between Jersey and the UAE, and I will be looking to enhance and strengthen these relationships during my visit. The UAE is an important gateway to the Gulf region and, as such, is of great value to Jersey businesses operating in a number of sectors.

Sean Costello said: “During the visit, Jersey Finance will continue to highlight the depth and breadth of the expertise Jersey’s financial services industry can offer, particularly in the banking and private wealth areas, and explore how we can diversify our financial services offering even further. The relationships Jersey has developed with the UAE are some of the best it has globally and, through further discussion, there are real opportunities to cement Jersey’s and the UAE’s positions as leaders in the international financial services marketplace and open up new opportunities beyond the financial services arena.

IMF and Mauritius Sign Memorandum of Understanding to Create Africa Training Institute


International Monetary Fund Deputy Managing Director Nemat Shafik and the authorities of Mauritius signed a Memorandum of Understanding today on Mauritius’ support for the IMF’s new Africa Training Institute. The Memorandum specifies the contribution that Mauritius is providing, which covers the costs of accommodating and training over 200 sub-Saharan African country officials per year through two-week courses, as well as housing and equipping the Institute. The Australian Agency for International Development and the Chinese authorities have also pledged financial support for the Institute, which will start operations in June 2013 and serve the whole of sub-Saharan Africa. Mauritius already hosts a Regional Technical Assistance Center for Southern Africa, known as AFRITAC South.

Mauritius is one of only a handful of leading middle-income countries in the world that partner with the IMF to support capacity development activities. With its financial support for AFRITAC South and the Africa Training Institute, the government of Mauritius signals its clear vision toward becoming a knowledge hub for Africa, especially on macroeconomic issues,” Ms. Shafik said at a signing ceremony in Washington, D.C.

The Africa Training Institute will offer courses and seminars for officials from central banks, ministries of finance, and other government agencies from across sub-Saharan Africa. Training will cover macroeconomic policymaking and financial programming, public finance, exchange rate and monetary policies, economic integration, and financial sector issues, including banking supervision. The training will complement the activities of the IMF’s Regional Technical Assistance Centers in Africa (AFRITACs), and other regional initiatives.

Through these course offerings the Africa Training Institute will help us address existing training gaps. Moreover, the Africa Training Institute will also help us meet the large demand for IMF training from sub-Saharan Africa, while bringing the region’s training volume on par with those of other regions. We hope that in the period ahead the Africa Training Institute will deliver more courses than the current contributions allow, and the IMF and the government of Mauritius will continue efforts to mobilize funds from other donors to scale up the operations.

The IMF offers technical assistance and training to member countries in addition to economic and financial surveillance, and lending operations. The IMF’s technical assistance helps member countries develop more effective institutions, legal frameworks and policies to promote economic stability and growth, while training strengthens the capacity of member countries’ officials to analyze economic developments and formulate and implement effective policies. In the year ending April 30, 2012, some 7,800 officials from member countries attended IMF training courses at headquarters in Washington, D.C., and at various locations around the world, including donor-supported regional training centers in Austria, Kuwait, and Singapore.

Mauritius acts as a gateway for SA companies’ African property funds

The African property market has, on the surface, a lot of things going for it. As economic growth takes off, urbanisation is sure to drive demand for housing and commercial space. So it is no surprise to see South African financial institutions rushing to establish African property funds...South Africa’s firms, via Mauritius, are driving an exciting phase of investment in Africa.

19 April 2013

Greenpeace Urges Mauritius to Deny Entry to Suspected Illegal South Korean Fishing Vessel


The Mauritian government should refuse port clearance for a South Korean ship accused of illegal fishing in West African waters, Greenpeace International said on Thursday.

Owned by Dongwon Industries, the purse seine fishing boat Premier is sailing to Port Louis, where it has been given permission to enter by Mauritian authorities, despite the fact it has been accused of illegal fishing off the coast of Africa. The Premier was later found to be using falsified letters claiming it had permission to fish in waters where no permission had been given. The Bureau of National Fisheries (BNF) in Liberia has confirmed that these letters were forged.

Mauritius will host a meeting next month of the Indian Ocean Tuna Commission (IOTC) where issues to curb illegal fishing, compliance and sustainability of the region's tuna fisheries will be discussed.

"The Mauritian government needs to follow other coastal states in the region that have already refused the vessels entry into their port. If Mauritius allows this vessel permission to enter it is a slap in the face of other states seriously fighting illegal fishing and a signal to the world that Port Louis is wide open for suspected illegal fishing operators. This would be an appalling move ahead of the IOTC meeting," Greenpeace International oceans campaigner Oliver Knowles said.

"If the Premier is allowed to unload its cargo of fish then Mauritius risks the reputation of the canneries and brands operating there because it is possible that illegally caught tuna will enter the Mauritian supply chain. We will be alerting businesses and consumers to this risk."

Greenpeace International has sent a letter the Mauritian prime minister and the fisheries minister demanding the Premier be refused port entry and services. Greenpeace wants tuna fishing in the Indian Ocean to be managed sustainably and with transparency, so the region is protected from big tuna companies only interested in fast cash at the expense of a healthy marine environment.

Temple Group and Aon Hewitt Ltd jointly host seminar on new private pension updates in Mauritius

Temple Group and Aon Hewitt Ltd are jointly hosting a full day seminar on the new private pension updates in Mauritius on the 31st of May 2013 at Maritim Hotel. Learn about the new avenues open to you with the coming in to effect of the Private Pension Schemes Act and its accompanying rules, including how to use trusts and foundations for private pensions. 

18 April 2013

Australia: CHOICE finds top selling Nespresso pods not so tasty

While George Clooney’s looks may have helped Nespresso explode into a billion dollar global brand, CHOICE has found the coffee capsules aren’t as hot as their competitors, placing fourth out of five in a taste test.

Nespresso coffee capsules – the most expensive in the survey – were described as “underwhelming”, “musty” and “watery” by CHOICE’s three experts, who blind sampled five shots.  Each shot was assessed for crema thickness, colour, aroma, mouth feel and aftertaste.

The top-tasting capsule was Coffee Capsule Delights Indian, which selling at 60 cents for 5.8 grams, was described by the testers as “nutty”, having “a good aroma” and “no bitter aftertaste” but “a very limited flavour”.   

The others ranked as follows:

- Best Espresso Mercurius Intenso   58c / 5.6g

- Piazza D’Oro Superiore     65c / 5.5g

- Nespresso Roma 68c / 5g

- Caffe Vergano 1882 Intenso 55c / 5.3g

“Nespresso has built its brand through its club and boutique stores, creating what is known as ‘premiumisation’.  However, the low ranking of their coffee capsules in our taste test is a reminder to consumers that an expensive, exclusive product isn’t always necessarily the best,” says Angela McDougall, food policy advisor for CHOICE.  

The Nespresso coffee capsule system was the fastest growing brand in the fresh coffee category in Australia in 2011, with global sales reaching $US 3.2 billion in 2011. According to Euromonitor, overall sales of single-serve packets – which include cups, pods and discs – jumped 31.3 % that year.

Since 2010, an estimated 50 competitors have entered the capsule market. These include Sara Lee’s Piazza D’Oro L’Or and the Ethical Coffee Company coming out with their Nespresso-compatible capsules while the likes of Aldi, Woolworths and Starbucks are now selling their own machines and capsules.

For fans of strong coffee, capsules can be insipid due to the smaller amount of coffee in them - an espresso from a café usually has 11 grams while the capsules tested by CHOICE ranged from 5 to 5.8 grams.  However, for some coffee drinkers, the attraction of pods is convenience and cost, with a capsule selling from 37c for Aldi Expressi to 68c for Nespresso.

Mauritius: FSC Licensing Process


1. What is the role of the Financial Services Commission?

The Financial Services Commission (FSC) is the independent regulator of financial services other than banking and Global Business in Mauritius. The FSC’s regulatory mandate is to license, regulate, monitor and supervise the conduct of business activities in the non-banking financial services in line with the internationally recognised principles and standards under the legal framework of the Financial Services Act 2007 (FSA), Securities Act 2005 (SA), the Insurance Act 2005 (IA) and the Private Pension Schemes Act 2012 (PPSA).

2. Who should apply for a licence with the FSC?

Any person who proposes to carry out financial services or financial business activities is required to seek a licence with the FSC.

3. What are financial services?

Financial services mean any financial services or financial business activities governed by the relevant Acts (Securities Act 2005, Insurance Act 2005 and Private Pension Scheme Act 2012) and includes financial business activity laid down in the FSA (for e.g., Asset Management, Credit Finance, Treasury Management, and Distribution of Financial Products).

4. What is a licence?

As per the law, a licence means any licence issued under any relevant Act (e.g. an insurance business licence and investment dealer licence) and includes approvals, authorisations, a recognition or registration for the conduct of a financial services activity under the relevant Acts.

5. What happen if someone operates financial services without a licence?

Any person who carries out, or holds himself as carrying out, in Mauritius any financial services without a licence issued by the FSC shall commit an offence and shall on conviction, be liable to a fine not exceeding one million rupees and to imprisonment for a term not exceeding 8 years.

6. How to apply for a licence?

An application for a licence shall be made in such form (specific Applications Forms available on FSC’s website) and manner as may be specified in FSC Rules and shall be accompanied by the following documents/information such as:

(a) a business plan or feasibility study outlining the proposed business activity of the applicant;
(b) particulars of promoters, beneficial owners, controllers and proposed directors in such form as may be specified in FSC Rules (proof of identity, details on the source of fund, evidence on the character of that person through the filling in of a Personal Questionnaire form, etc);
(c) such fees, as may be specified in the FSC Rules; and
(d) such other information as may be specified in FSC Rules or otherwise required by the FSC to determine the application.

The above information should be in the application pack submitted to the Commission.

7. How an application for a licence is determined at the FSC?

Once a complete application pack is submitted, there is a clear licensing procedure at the FSC level to be followed. This includes screening, processing and scrutinising the application pack based on the following licensing criteria/requirements:

(i) The FSC will ensure that the proposed activity complies with the laws and regulations of Mauritius, is not contrary to public interest and will not cause prejudice to the good repute of the Mauritian International Financial Centre. In this respect, the FSC will conduct a risk assessment of the proposed activity to ensure that the company has the necessary systems and procedures to mitigate any risks identified.
(ii) The FSC will also ensure that the proposed business plan is meeting the licensing requirement as laid down in the relevant Acts (FSA, IA, SA, PPSA) and is able to demonstrate that upon licensing the applicant will be able to meet all the regulatory requirements laid in the relevant Acts.
(iii) The FSC will need to identify who are the people behind the application (the promoters/ the beneficial owners) and who are the parties involved (directors, senior officers). In assessing whether those persons are fit and proper to conduct the business, the FSC will look at their:

  • financial standing;
  • relevant education, qualifications and experience,;
  • ability to perform the relevant functions properly, efficiently, honestly and fairly; and
  • reputation, character, financial integrity and reliability.
(iv) The FSC will also look at the business by ensuring that the applicant has adequate resources, infrastructure, staff with the appropriate competence, experience and proficiency to carry out the activity for which the licence is sought and it has adequate arrangements to ensure compliance with the laws and the conditions of its licence.


8. What are the safeguarding measures that the FSC considers to ensure that the licensing procedure has been fully applied and complied with in a fair manner?

The FSC will assess the application pack to determine whether the applicant has met all the licensing criteria as explained above. In so doing, the FSC may:

(i) ask the applicant for more information to complete the application pack; and/ or
(ii) conduct interviews with the applicants – to assess the knowledge of the applicant in the field licence is being sought.

Once all information is gathered and that an informed recommendation can be made, the application is submitted to an Applications Committee, chaired by the Chief Executive of the FSC and constituted of Head of Technical Units at the FSC for a final recommendation for approval/ rejection of the proposed application. Where the Applications Committee is satisfied that the application meets all the licensing requirements set out the relevant Acts, it shall approve the application on such terms and conditions.

The Applications Committee may also refer the application to the Board with recommendations, observations, or comments.

9. What happens once an application has been approved by the Applications Committee?

The FSC will issue the licence on such terms and conditions as it thinks fit. The terms and conditions are licensing conditions attached to a licence. The licensing conditions vary according to the types of licence issued.

Examples of such licensing conditions include

  • Requirement for maintaining minimum unimpaired capital
  • Requirement to obtain FSC’s prior approval for the appointment of any Director, Manager, auditor or senior member of staff.
10. When does FSC not approve an application for a licence?

The FSC will not approve an application for a licence where business models are not satisfactory or may cause prejudice to the good repute of the jurisdiction or where people involved is not able to demonstrate their fitness and propriety, applications are rejected.

11. What happens once a licence is issued?

Once an applicant is granted a licence, it becomes a licensee of the FSC and as such, becomes subject to the Mauritian legislative framework, including the AML/CFT Code as well as any other Guidelines and Circulars issued by the FSC.

It is imperative to understand that there are licensing conditions attached to a licence issued by the FSC and the company has to ensure that it is at all times complying with such conditions.

The FSC will on an ongoing basis monitor the conduct of business activities of its licensees. The FSC focuses, inter alia, on market conduct, anti-money laundering and combating the financing of terrorism measures taken, corporate governance principles implemented along with observance of international norms and standards by the licensee.


Financial Services Commission
17 April 2013





Mauritius: FSC Global Business Fact Sheet


  • Global Business in Mauritius

Global Business (GB) is a regime available in Mauritius for resident corporations proposing to conduct business outside Mauritius. GB is regulated by the Financial Services Commission (FSC) under S71 (1) of the Financial Services Act 2007 (FSA). There are 2 categories of Global Business Licences:

1) Category 1 Global Business (GBC1) Licence; and
2) Category 2 Global Business (GBC2) Licence

  • Eligibility for a Global Business Licence (GBL)

To operate in the GB sector, the following requirements need to be fulfilled:

a. As per S71 (1) FSA, applicants for a GBL need to be a “resident corporation”:

i. For GBC1 companies, under S71(7) of the FSA, “resident corporation” means a company incorporated or registered under the Companies Act, a société or partnership registered in Mauritius, a trust, or any other body of persons governed by the laws of Mauritius.

The Mauritian laws also allow other types of body of persons to be established; namely foundations under the Foundation Act and limited partnerships under the Limited Partnership Act.

ii. For GBC2 companies, under S71 (3) of the FSA, a “resident corporation” shall be a private company.

b. Conduct of Business

A “resident corporation” conducting business outside of Mauritius may opt to operate under the GB regime.

A company applying for a GB Licence must pass the ultimate business purpose test which assesses whether the applicant will be conducting business outside Mauritius. In applying this test to an application for a GBL, the FSC assesses whether the ultimate purpose of the applicant’s proposed activity is an investment to be made or a service to be provided outside Mauritius.

c. Management and Control

Pursuant to S71 (4) (b) of the FSA, in determining whether the conduct of business is being managed and controlled from Mauritius, the FSC may, as it may deem relevant in the circumstances, and take into consideration whether the corporation:

(i) shall have or has at least 2 directors, resident in Mauritius, of sufficient calibre to exercise independence of mind and judgement;
(ii) shall maintain or maintains at all times its principal bank account in Mauritius;
(iii) shall keep and maintain or keeps and maintains, at all times, its accounting records at its registered office in Mauritius;
(iv) shall prepare, or proposes to prepare or prepares its statutory financial statements and causes or proposes to have such financial statements to be audited in Mauritius; and
(v) shall provide or provides for meetings of directors to include as least 2 directors from Mauritius.