IFC Review - The Isle of Man: Proud of its Place on the International Stage

With the Isle of Man experiencing 30 years of continuous economic growth, Malcolm Couch examines the role the island's status as a leading financial centre played in achieving this remarkable statistic.

IFC Review: The Offshore Stimulus for Onshore Activity

Robert Briant and Joshua Mangeot consider the mutually beneficial symbiotic relationship between the BVI and other IFCs and their onshore counterparts.

IFC Review: In the Chair with the US Treasury

With numerous compliance issues among other problems facing the industry stemming from FATCA, we speak directly to the source of the FATCA legislation, the US Treasury to address the issues raised by FATCA objectors.

IFC Review: Are International Bureaucrats Winning the War Against Low-Tax Jurisdictions and Fiscal Competition?

With the global financial industry under pressure from international regulatory iniatives, Dan Mitchell and Brian Garst examine if this regulatory zeal has gone too far. 

BIZweek Edition 19 – Samedi 01 Novembre 2014

• Centre Financier International: Le Manque de Vision et de Marketing Décrié
• Alastair Bryce “Economic miracles don't happen by themselves”
• Sushil Khushiram « Je ne serai pas à la FSC »

BIZweek Edition 19

Moody's downgrades Mauritius Commercial Bank's deposit ratings to Baa3 from Baa1; ratings placed on review for further downgrade

Moody's Investors Service has today downgraded Mauritius Commercial Bank Ltd's long-term and short-term deposit ratings to Baa3/Prime-3 from Baa1/Prime-2. Concurrently, Moody's lowered the bank's baseline credit assessment (BCA) to ba1 from baa3 within the D+ standalone bank financial strength rating (BFSR) category. All ratings placed on review for further downgrade.

India: JMR Infotech Implements OFSAA AML and KYC in AfrAsia Bank Limited, Mauritius

JMR Infotech, a leader in banking technology solutions and services, announced on October 30, 2104 that Mauritius-based AfrAsia Bank Limited has gone live with Anti-Money Laundering (AML) and Know Your Customer (KYC) solutions. JMR Infotech has implemented these solutions successfully at the bank in a record three and half months time. Scope of the project also included fetching and loading of data from core banking system. Initially planned to go live on 14 December 2014, JMR Infotech team succeeded in implementing AML on 1 October 2014 and KYC on 14 October 2014 across the bank’s system. This milestone helped the bank to meet its regulatory deadline comfortably.

AML will help the bank to efficiently detect, investigate and report suspected money laundering activity to comply with current and future regulations and guidelines. KYC will allow the bank to meet regulatory requirements, improve overall customer relationships, and provide cost effective measures to identify and prevent financial crimes. 

Commenting on the extraordinary effort by JMR Infotech, Bishwajit Mazumder, Head of Group Operations, AfrAsia Bank said, “this was made possible with the hard work of the committed team and effective project management. JMR Infotech has been able to deliver despite all odds.”

Speaking on the occasion of AfrAsia Bank going live, Jayafar Moidu, CEO, JMR Infotech said “Implementation of this project in record time is a reflection of our commitment to customers. This project has set a new benchmark for JMR Infotech and reinforces our leadership position in Mauritius. I would like to use this opportunity to once again thank our customers not only the Mauritius market, but the global banking and financial services industry.”

About JMR Infotech

With delivery and development centres in India, sizable global presence and customers spread across 5 continents, JMR Infotech is a leader in banking & financial services software and software-related services. In our short existence, since 2007, we have grown to have top banks as our clients. 

Our leadership in the Banking and Financial Services (BFS) IT market is backed by better understanding of client's business needs and innovative solutions to advance their business goals. The title of World's first Oracle Platinum Partner fully specialized in all financial solutions is a testimonial to our comprehensive offering, strong focus and unmatched expertise in BFS domain. 

In August 2014, Global Banking & Finance Review recognized JMR Infotech’s thought leadership, technical prowess and customer focus by presenting Best Core banking Technology Provider award for Middle East and Africa region.

Our offerings are delivered through our unique customer centric Extended Arm engagement model through which we work as Extended Arm of our clients, helping them reduce investment and total cost of ownership.

About AfrAsia Bank

Strategically based in the Mauritius International Financial Centre and with representation in key dynamic markets, AfrAsia Bank Limited specialises in banking that builds bridges between Africa, Asia and the world, combining its strengths and expertise in four core divisions:

• Private Banking and Wealth Management 
• Corporate and Investment Banking 
• International Banking
• Treasury

Since inception in 2007, the Bank has expanded through a combination of substantial organic growth and various strategic acquisitions. With clients in 104 countries, our core activities are in Mauritius, South Africa, United Kingdom and Zimbabwe with representative offices in Johannesburg, Cape Town and London, as well as a banking presence through AfrAsia Bank (Zimbabwe) Limited.

Our entrepreneurial approach helps us to develop flexible investment solutions and provide tailor-made advice, together with our asset management and investment arms, AfrAsia Capital Management and AfrAsia Corporate Finance respectively.

Mauritius ranks 28th worldwide in Overall Ease of Doing Business 2015

Mauritius tops Africa's Sub-Saharan economies and is ranked at the 28th position worldwide on Overall Ease of Doing Business, according to the World Bank group's Doing Business 2015 Report entitled: Going Beyond Efficiency, launched yesterday.

Mauritius has climbed one place compared to its 29th position in Overall Ease of Doing Business 2014. The country has the region’s highest ranking on the ease of doing business followed by South Africa (43) and Rwanda (46) out of the 189 economies rated by the International Finance Corporation and the World Bank.

According to the 12th edition of the report, Mauritius is also ranked at the 13th and 17th position with regard to paying taxes and trading across borders respectively. As for distance to frontier the country has scored an overall score of 74.8 compared to 74.4 in the 2014 report, representing an improvement of 0.4 point.

Doing Business 2015 report states that the country’s performance can be mostly attributed to the continuous reforms on which it has embarked thus transforming and improving the business climate into a more globally competitive one. Reforms have also made the investment procedures significantly easier for people to do business, says the report.

It further highlights that the country has made the procedures for starting a business and enforcing contracts easier by reducing trade license fees and by introducing an electronic filing system for court users.

With regards to the Sub-Saharan African region, the report observes that from June 2013 to June 2014, 35 out of the 47 economies in Sub-Saharan Africa implemented at least one regulatory reform making it easier to do business with a set of 75 reforms in total.

Since 2005, all economies in the region have implemented business regulatory reforms in the areas measured by Doing Business with Rwanda having the largest number of reforms in the region followed by Mauritius and Sierra Leone, concludes the report.

Doing Business Report 2015 measures regulations based on 11 areas of the life cycle of a business. Ten of these areas are included in this year’s ranking on the ease of doing business namely: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking. 

Mourant Ozannes: Crociani - The Effect of an Exclusive Jurisdiction Clause in a Trust Instrument

A review of the Jersey Court of Appeal decision in Crociani in respect of forum and consideration of its impact on both the effect of an exclusive jurisdiction clause in a trust instrument and the test for permission to appeal from all future decisions of the Jersey Royal Court.

Crociani: the effect of an exclusive jurisdiction clause in a trust instrument

Mauritius: Presentations by the FSC Chief Executive at the BLC Workshop on AML/CFT

Securities Market & Investment Funds held on 28 October 2014

Insurance Workshop on 27 August 2014

What is a lawyer?

The distinction between lawyers and non-lawyers is becoming blurred – but we still have one thing to hold on to.

The Law Society Gazette

Mauritius: Expansion of the Double Taxation Avoidance Agreement (DTAA) network

DTAA with the Republic of Congo

The DTAA between the Republic of Mauritius and the Republic of Congo has entered into force on 8 October 2014. The provisions of the Agreement will apply in accordance with Article 28(2) of the DTAA.

DTAA with the Republic of Malta

The Republic of Mauritius has signed a DTAA with the Republic of Malta on 15 October 2014. The Agreement shall enter into force after completion of necessary internal legal procedures by both parties and reciprocal notification.

FATF: Risk-Based Approach for the Banking Sector

The risk-based approach is central to the effective implementation of the FATF Recommendations. A risk-based approach means that countries, competent authorities, and banks identify, assess, and understand the money laundering and terrorist financing risk to which they are exposed, and take the appropriate mitigation measures in accordance with the level of risk.

This flexibility allows for a more efficient use of resources, as banks, countries and competent authorities can decide on the most effective way to mitigate the money laundering / terrorist financing risks they have identified. It enables them to focus their resources and take enhanced measures in situations where the risks are higher, apply simplified measures where the risks are lower and exempt low risk activities. The implementation of the risk-based approach will avoid the consequences of inappropriate de-risking behaviour.

This Risk-Based Approach Guidance for the Banking Sector will help in the design and implementation of this approach for the banking sector, taking into account national risk assessments and the national legal and regulatory framework. It will help develop a common understanding of the risk-based approach between supervisory authorities and banks. The practical examples in this guidance will further assist in understanding the various elements of this approach.

This guidance consists of three sections.

• Section I explains the key elements of the risk-based approach
• Section II provides specific guidance for banking supervisors
• Section III provides specific guidance for banks

FATF Guidance on Transparency and Beneficial Ownership

The FATF Guidance on Transparency and Beneficial Ownership will assist countries to design and implement measures that will deter and prevent the misuse of corporate vehicles, such as companies, trusts and other types of legal persons and arrangements – for money laundering, terrorist financing and other illicit purposes.

Corporate vehicles play an essential role in the global economy, conducting a wide range of legitimate commercial and entrepreneurial activities. However, they have also been misused by criminals to disguise and convert the proceeds of their crimes. The appeal to criminals lies in the fact that corporate vehicles can be misused to circumvent controls by disguising the identity of known or suspected criminals and the source of funds or assets. The misuse of corporate vehicles could be significantly reduced if accurate information regarding both the legal owner and the ultimate beneficial owner, the source of the corporate vehicle’s assets, and its activities were readily available to the authorities. It is often very difficult for competent authorities to identify the natural, real person who truly has ownership and control of a company, trust or other corporate vehicle, particularly when the arrangement involves several countries.  

Criminals make use of this lack of access to beneficial ownership information. By setting up one or more corporate vehicles, they are able to hide their identity, the true purpose of the account and the source or use of funds or property associated with the corporate vehicle.

The FATF Recommendations provide measures that address the transparency and beneficial ownership of legal persons (Recommendation 24) and legal arrangements (Recommendations 25). Countries should take measures to prevent the misuse of legal persons and arrangements from being misused for criminal purposes, including by:

• Assessing the risks associated with legal persons and legal arrangements
• Making legal persons and legal arrangements sufficiently transparent, and
• Ensuring that accurate and up-to-date basic and beneficial ownership information is available to competent authorities in a timely fashion.

While the transparency and beneficial ownership requirements of the FATF Recommendations are aimed at fighting money laundering and the financing of terrorism, they also support efforts to prevent other serious crimes such as tax crimes and corruption. The FATF’s role as the standard setter on beneficial ownership was echoed in the actions taken by global leaders such as the G20 Leaders’ commitment to implement the FATF standards on beneficial ownership.

Earlier mutual evaluation cycles showed that implementing the FATF requirements on transparency and beneficial ownership proved challenging for a number of countries. The FATF has therefore developed this guidance, with input from private sector and corruption experts, to assist policy makers and practitioners in national authorities to identify, design and implement appropriate measures to prevent the misuse of corporate vehicles.

FSC Mauritius issues Competency Standards

The Financial Services Commission, Mauritius (FSC Mauritius) is issuing the Competency Standards as part of its “Fair Market Conduct Programme”. The Competency Standards formalise the minimum technical competencies, in terms of knowledge and skills, which specific licensees need to have. The Competency Standards provide an indication to the licensees on how to demonstrate and maintain the minimum technical

competencies.

The Competency Standards are defined in terms of:

• the minimum technical competencies to demonstrate competence
• the minimum qualifications, training and experience requirements to demonstrate competence
• the minimum Continuous Professional Development (CPD) requirements to maintain competence

The Competency Standards apply to licensees and any of their officers and/or their employees involved in:

• the provision of advice
• the provision of intermediaries services
• the management and control function

A phased approach has been adopted for the development of the Competency Standards for the different sectors in the non-banking financial industry. The Competency Standards being issued today are for the following types of licensees:

• Insurance intermediaries: Insurance Salesperson, Insurance Agent, Insurance/Re-insurance Broker and Broking Staff
• Securities intermediaries: Investment Dealer, Investment Adviser and CIS Manager
• Management and control function: Money Laundering Reporting Officer

The Competency Standards will be reviewed on a continuing basis to include other licensees.

The FSC Mauritius would like to thank all respondents who provided their comments during the consultation process.

The Competency Standards will be effective as from 01 January 2015.

Financial Services Commission, Mauritius

27 October 2014

Brochure

FSC Mauritius issues Guidelines for Advertising and Marketing of Financial Products

The Financial Services Commission, Mauritius (FSC Mauritius) is issuing the Guidelines for Advertising and Marketing of Financial Products (the ‘Guidelines’) as part of its “Fair Market Conduct Programme”. The Guidelines set the recommended standards for licensed entities, regarding their advertising function, and promotional roles and responsibilities vis-à-vis consumers of non-banking financial products and services.

The aim of the Guidelines is to promote responsible, ethical and professional conduct by Promoters in relation to the advertising and marketing of non-banking financial products and services, targeting consumers of financial services in Mauritius.

The Guidelines will notably ensure that promoters provide clear, accurate and balanced information in their advertising and marketing materials, and that they do not engage in misleading or deceptive conduct.

The Guidelines moreover comprise some innovative clauses that would allow the FSC Mauritius to monitor the disclosure and release of promotional materials, both in printed and electronic formats. The practice of “cold calls”, which is becoming more frequent nowadays, is inter-alia addressed in the Guidelines.

The FSC Mauritius would like to thank the representatives of the various industry associations, consumer protection bodies and other stakeholders who have worked collaboratively on the Consultative Committee to finalise the Guidelines.

The Guidelines will be effective as from 01 January 2015.

Financial Services Commission, Mauritius

27 October 2014

Brochure

FAQs

Joint CySEC and FSC Mauritius Alert: Warning against LiveFX Trader

The Cyprus Securities and Exchange Commission (the “CySEC”) and the Financial Services Commission, Mauritius (the “FSC Mauritius”) would like to alert the public with regards to LiveFX Trader (“LiveFX”).

Public Notice

FSC Mauritius issues Investor Alert: African Stock Exchange

The Financial Services Commission, Mauritius ( the ‘FSC Mauritius’ ) has come across an Article which appeared on the webpage globalcustody.net (http://www.globalcustody.net/mu/newswire_latest_1769)

Please note that the FSC Mauritius has not licensed any African Stock Exchange with the name of ‘AFSX’ based in Mauritius.

Your attention is drawn to Section 9 of the Securities Act 2005 which states that no person can operate a securities exchange without being granted a licence by the FSC Mauritius.

You are further informed that Section 21 of the Securities Act 2005 restricts the use of the word ‘stock exchange’ except with the approval of the FSC Mauritius.

You may wish to consult the list of holders of a Securities Exchange Licence on the FSC Mauritius website: http://www.fscmauritius.org

The public is urged to exercise due caution.

Financial Services Commission, Mauritius

24 October 2014

FSC Mauritius issues Investor Alert: African Stock Exchange

Deutsche Börse partners with African Stock Exchange

CBS Press Release - Outward transfers by BMI Offshore Bank (BMIO)

Central Bank of Seychelles (CBS) wishes to comment on the situation currently being faced by BMIO, where it is not able to effect outward foreign currency denominated tranfers for its customers.

Press Release BMIO - Outward transfers

Seychelles Offshore Bank: The mysterious closure of BMI

BMI Bank is an Offshore Bank, registered in Seychelles and regulated by the Central Bank of Seychelles, as a joint venture between BMI Bank (Bahrain) and Nouvobanq.

FATF clarifies risk-based approach: case-by-case, not wholesale de-risking

The FATF Plenary discussed the issue of de-risking on 22 October. Generally speaking, de-risking refers to the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach. De-risking can be the result of various drivers, such as concerns about profitability, prudential requirements, anxiety after the global financial crisis, and reputational risk. It is a misconception to characterise de-risking exclusively as an anti-money laundering issue.

This issue is of crucial importance to the FATF for two main reasons:

1. De-risking can introduce risk and opacity into the global financial system, as the termination of account relationships has the potential to force entities, and persons into less regulated or unregulated channels. Moving funds through regulated, traceable channels facilitates the implementation of anti-money laundering / countering the financing of terrorism (AML/CFT) measures.
2. It is central to our mandate to ensure that the global AML/CFT standard is well understood and accurately implemented, and that countries and their financial institutions are provided with support in designing AML/CFT measures that meet the goal of financial inclusion.

Recent supervisory and enforcement actions have raised the consciousness of banks and their boards about these issues. However, it is important to put into context that these were extremely egregious cases involving banks who deliberately broke the law, in some cases for more than a decade, and had significant fundamental AML/CFT failings.

“De-risking” should never be an excuse for a bank to avoid implementing a risk-based approach, in line with the FATF standards. The FATF Recommendations only require financial institutions to terminate customer relationships, on a case-by-case basis, where the money laundering and terrorist financing risks cannot be mitigated. This is fully in line with AML/CFT objectives. What is not in line with the FATF standards is the wholesale cutting loose of entire classes of customer, without taking into account, seriously and comprehensively, their level of risk or risk mitigation measures for individual customers within a particular sector.

The risk-based approach should be the cornerstone of an effective AML/CFT system, and is essential to properly managing risks. The FATF expects financial institutions to identify, assess and understand their money laundering and terrorist financing risks and take commensurate measures in order to mitigate them. This does not imply a “zero failure” approach.

The FATF is committed to financial inclusion, and effective implementation of AML/CFT measures through proper implementation of the risk-based approach.

Given the importance of this issue, and in light of these discussions the FATF has agreed:

• To gather further evidence and analysis on the drivers and scale of de-risking. The FATF’s country assessments will be critically important in this regard, not least for FATF to reinforce its expectations on risk understanding and management. The FATF will also make full use of the work being conducted in other relevant international groups and forums, including the G20 Global Partnership for Financial Inclusion, the IMF, the World Bank Group, and the Basel Committee on Banking Supervision.
• To continue to disseminate its various reports on risks, methods and trends allowing service providers to better understand money laundering and terrorist financing risks related to specific categories of customers and devise effective risk-based approaches.
• To continue a number of existing activities and projects providing information and guidance to inform risk-based decision-making, including work on the risk-based approach for banks, the risk-based approach for money or value transfer services, best practices on combating the abuse of non-profit organisations, effective supervision and enforcement.
• To stay abreast of developments in this area and to continue to interact with all actors relevant to this topic including the sectors most affected, regulators, supervisors, and banks.
• To consider, on the basis of the evidence on the drivers and scale of de-risking, whether further work is necessary on specific issues. The FATF’s Policy and Development Group will determine this during the February 2015 FATF Plenary. 

The FATF is adopting at this Plenary Risk-based Approach Guidance for the Banking Sector which gives clear guidance on how to properly implement the risk-based approach, and is explicitly meant to be read in conjunction with the FATF Guidance on AML/CFT and Financial Inclusion. Banks who implement the risk-based approach, in line with the guidance given in these two papers, will be well-placed to avoid the consequences of inappropriate de-risking behaviour.

Appleby - Letters of Wishes: adequate deliberations

Letters of Wishes are an important part of the trust landscape, especially offshore. However, their status is little discussed and often misunderstood. In this Trusts & Trustees article, Keith Robinson responds to Stephen Moverley Smith QC and Andrew Holden’s article ‘Too many cooks: Letters of wishes and the ongoing role of the settlor’, arguing that Letters of Wishes are an important and legitimate part of trustees’ ‘adequate deliberations’.

Article first published in Trusts & Trustees (Vol. 20, No. 8), October 2014

FATF Guidance on Transparency and Beneficial Ownership

Corporate vehicles, such as companies and trusts, play an integral role in the global economy. However, under certain conditions, they have been misused for criminal purposes including money laundering and corruption. Taking action to prevent the misuse of corporate vehicles is essential to ensure the integrity of the international financial system, and support economic growth and development.

The FATF has set international standards which require countries to implement measures to ensure that accurate information on the beneficial ownership of legal persons and legal arrangements is available to competent authorities in a timely fashion. The FATF Guidance on Transparency and Beneficial Ownership will assist jurisdictions with their implementation of the FATF standards in this area. 

FSC Mauritius: Launching of the Guidelines for Advertising and Marketing of Financial Products & Competency Framework

In line with its statutory functions and powers to take measures for better protection of consumers of financial services, the Financial Services Commission ("FSC") will be launching the Guidelines for the Advertising and Marketing of Financial Products on 27 October 2014. The Guidelines fundamentally set the recommended standards for licensed entities, in terms of advertising functions, and promotional roles and responsibilities vis-à-vis consumers of financial services.

As part of the "Fair Market Conduct Programme" the Guidelines shall complement the existing legal provisions at the point of sale of financial products. The Guidelines will also serve as a valuable tool for supervision for the FSC, mainly off-site, to ensure that promoters of financial products in Mauritius do not engage in any wrongful and misleading conduct of business, which are ultimately detrimental and costly to financial services consumers or investors.

The aim of the Guidelines is to promote responsible, ethical and professional conduct among persons who are involved in the chain of advertising and marketing of financial products that are directed at consumers of financial services in Mauritius. The Guidelines further ensures that promoters of advertising and marketing campaigns will give clear, accurate and balanced information. The Guidelines finally makes adequate provision for addressing the riskiness, and duties and roles of promoters when engaged in "cold call" practices, amongst other advertising practices.

Overall, the implementation of the Guidelines shall have a positive impact on the organisational processes of the licensed entities of the FSC in terms of their advertising and marketing outcomes and allow the FSC to monitor effectively the disclosure and release of promotional materials, both in printed formats and electronically.

Competency Standards

The FSC will also be launching the Competency Standards for the financial services sector on 27 October 2014 which establishes the minimum competence for specific licensees dealing with consumers and investors. This will help in ensuring that consumers and investors can expect professional conduct from the intermediaries that they deal with.

The Competency Standards set the level of professionalism that the licensee must meet and maintain in order to qualify and remain qualified for the license. It provides the minimum level of professional knowledge, understanding and skills required for a professional to be able to practise safely and effectively.

China Offshore Trusts and Foundations Guide

Welcome to the 5th. Annual China Offshore Trusts and Foundations Guide, a report that offers information about trust and foundation information at major offshore jurisdictions around the world, here you will be able to look at the most recent data, figures and articles.

This guide has included a few industry experts’ viewpoints and detailed data of various offshore jurisdictions, with maps, data and tables to maximum your knowledge base as well as your reading pleasure. Offshore trusts and foundations have always been the favorite vehicles and powerful weapon of corperates and HNWIs’ around the world, which will further succeed your business and most importantly, add value to your wealth and make sure your assets are well protected.

The China Offshore Trusts and Foundations Guide will be presented to you on a yearly basis, this guide covers latest reports and analysis from some of the most reputable professional institutions in the world in the format of reports, interviews, Q&As and discussions, we hope to help with your choice of the right jurisdiction for offshore assets protection and succession, to succeed your businesses at these jurisdictions, and expand to the rest of the world and take you to the next generation.

Forbes Africa - Mauritius: Paradise Found?

Once derided as a tiny sugar-dependent boat stop in the middle of the Indian Ocean, Mauritius is ploughing through the 21st century with confidence and prosperity. As it heads for elections, the country has peace, stability and appears to have defeated the great investment killer – corruption.

A Landmark First for Africa: Seychelles Uses Contingent Credit for Disasters

Seychelles has become the first nation in Africa to gain access to a World Bank contingency financing facility aimed at building resilience to the effects of catastrophic events impacting its citizens and economy. This is the ultimate rainy-day fund as it means a reserve of US$7 million becomes available to the Ministry of Finance in the event of a disaster. 

Such immediate liquidity supports the government’s current efforts for improved disaster response and reconstruction.  The facility is known as a Catastrophe Deferred Drawdown Option which is part of the country’s larger Development Policy Loan. The drawdown options acts as a contingent line of credit that enables Seychelles to “draw down” funds in the immediate aftermath of any natural disaster, such as a cyclone or landslide, which is declared a national emergency by the government. Why is this significant? Pierre Laporte, minister of finance, trade and investment for the island country, explains:

“The reason the DPL with Cat DDO is so significant is because it provides immediate liquidity when medium-sized or cumulative disasters hit Seychelles. As a result, we can avoid diverting funds originally set aside for development projects and attend to the needs of our country's poorest.”

The facility is available for three years, and can be renewed for up to 15 years. It enables Seychelles to be better prepared to respond quickly to natural disasters which frequently occur in the region.  Because of its location, topography and landscape, Seychelles is often impacted by cyclones, flooding and mudslides. The most recent event occurred in January 2013 when Tropical Cyclone Felleng hit the country. While no deaths were reported, the cyclone caused US$8.4 million in damages (equivalent to 0.77 percent of the 2012 country’s GDP) and losses in key sectors, such as transport and tourism.

For countries to be eligible for the loan, they must already have a functioning hazard risk management program in place. The facility, therefore, goes beyond financing. It includes post-disaster recovery to further support the strengthening of the legal framework for disaster risk management and the integration of disaster risk reduction into development planning and decision-making. In the case of Seychelles, the Government has spent the last two decades ramping up its efforts to improve resilience from disasters.

“The Government has shown its commitment to strengthening disaster risk management, which is illustrated by recently approving a Disaster Risk Management Act, a disaster risk management policy and by establishing a risk information database,” said Doekle Wielinga, the Bank’s task team leader for the DPL with Cat DDO.

The Catastrophe Deferred Drawdown Option also complements other Bank support for private sector development, social protection and fisheries development. Such support includes the Southwest Indian Ocean Risk Assessment and Financing Initiative, financed by the Global Facility for Disaster Reduction and Recovery through the European Union (EU) - funded “Africa Caribbean Pacific - EU Natural Disaster Risk Reduction Program”. The aim of this program is to improve the understanding of disaster risks and risk financing solutions of five Indian Ocean island states. There is also support from a third, World Bank financed Seychelles Sustainability and Development Competitiveness Loan which supports reforms through improving the business climate, enhancing fiscal transparency and increasing fiscal oversight and controls over public enterprises.

“By efficiently responding to disasters and strengthening its disaster risk management plan, we hope there will be significant improvements in the lives of Seychelles’ most vulnerable citizens,” said Ede Ijjasz-Vasquez, the Bank’s senior director for the social, urban, rural and resilience global practice. “The DPL with Cat DDO adds yet another vital component to the country’s risk reduction policies.” 

My Beautiful Laundrette

Criminals and corrupt officials from around the globe take advantage of Britain’s lax corporate rules

Mauritius selects light rail contractor

The Ministry of Public Infrastructure has awarded a partnership of Indian construction company Afcons Infrastructure and Spanish rolling stock manufacturer Construcciones y Auxiliar de Ferrocarriles (CAF) a contract to build a 37 km light rail line from the capital Port Louis to Curepipe.

Much of the route, known locally as métro leger, would use the alignment of the standard gauge Mauritius Government Railways’ Midland Line, which closed in 1964. There would be 20 stops, some of which will be designed as hubs for bus feeder services.

Of the 11 companies submitting expressions of interest in April 2013, six were shortlisted, with only Afcons and China State Construction Engineering Co responding to the request for proposals in November. CSCE was subsequently disqualified, as it has been blacklisted by the World Bank.

Afcons and CAF submitted both a base proposal and an alternative proposal, which were assessed by project consultant Singapore Co-operation Enterprise. Its quote was reduced from an initial US$862m to US$786m.

The Indian government is providing a US$600m credit line, with US$200m at 1% interest and US$400m at less than 2%. The remaining US$250m will be raised on the local market. The government has pledged that light rail will be no more expensive to use than buses when it opens in October 2018.

Source: Railways Gazette

Mauritius: FSC issues Public Notices warning against two Global Schemes - Four Elements PCC + Lancelot Global PCC

Warning against Four Elements PCC

The Four Elements PCC (‘the Company’) was granted a Category 1 Global Business licence by the Financial Services Commission, Mauritius (the ‘FSC Mauritius’) on 21 May 2008 and was authorised as a Collective Investment Scheme.

On the basis of the findings of the investigation conducted at the registered office of the Company, and in accordance with its functions to protect consumers of financial services, the FSC Mauritius has initiated enforcement actions against the Company. Kindly note that the Company is still subject to enforcement actions by the FSC Mauritius.

You would note that a direction letter was issued to the Company whereby amongst others, the Company was required not to take any new business/investor pending compliance with the other directions to the satisfaction of the FSC Mauritius.

Please be further notified that the above is still in force pending further notice from the FSC Mauritius.

Financial Services Commission, Mauritius

20 October 2014

Warning against Lancelot Global PCC

Lancelot Global PCC (‘the Company’) was granted a Category 1 Global Business licence by the Financial Services Commission, Mauritius (the ‘FSC Mauritius’) on 10 April 2009 and was authorised as a Collective Investment Scheme.

On the basis of the findings of the investigation conducted at the registered office of the Company, and in accordance with its functions to protect consumers of financial services, the FSC Mauritius has initiated enforcement actions against the Company. Kindly note that the Company is still subject to enforcement actions by the FSC Mauritius.

You would note that a direction letter was issued to the Company whereby amongst others, the Company was required not to take any new business/investor pending compliance with the other directions to the satisfaction of the FSC Mauritius.

Please be further notified that the above is still in force pending further notice from the FSC Mauritius.

Financial Services Commission, Mauritius

20 October 2014

BIZweek Edition 17 – Samedi 18 Octobre 2014

Assurances: Offre Ferme de SWAN pour les 23 % de la SICOM

Postes Clés: Régulateurs, Corps Parapublics et Nominés Politiques

Réputation Internationale: Maurice ‘Off-Chor’

BIZweek Edition 17

Mauritius: LUX* Belle Mare partners with Michelin-star chef Vineet Bhatia

Recently reopened after an extensive makeover by design queen Kelly Hoppen, luxury Mauritian beach resort LUX* Belle Mare welcomes the culinary talents of celebrity chef Vineet Bhatia, dubbed the ‘finest modern-Indian chef anywhere’ by The Times’ critic AA Gill.

This is not the first accolade for the innovative chef, who made his name after arriving in London with nothing but ambition and a love of Indian food. A leading light in the reinvention of Indian cuisine, chef Vineet won his first Michelin star at Zakia in 2001, followed by another in 2009 for his own restaurant Rasoi in London and Geneva.

His imaginative cuisine combines a masterful use of textures, flavours and temperatures with a deep respect for Indian cooking traditions.

Not content with opening restaurants around the world and acting as First and Business Class in-flight dining consultant for Qatar Airways, Vineet has also created the concept for the menu at Amari by Vineet, LUX* Belle Mare’s fine dining restaurant. ‘Mauritius is like my second home’, says the chef, who fell for the beautiful beaches and restaurants around the resort, where guests can celebrate life and enjoy light living.

And adds “Together with LUX*, we both believe in quality products and in looking at the guest’s satisfaction. We share a common platform to share our philosophy and hosts together.” His aim is to create a memorable gastronomic experience for guests to cherish long after they’ve gone home – after all, ‘amari’ means ‘forever’ in Hindi.

Chef Vineet has travelled extensively throughout India to understand the subtle variances and the range of flavours and tastes. At Amari, the island’s tropical bounty has also been an inspiration, from local fish and chutneys to citronella-infused desserts. Here, food is all about the senses: expect the lightest, freshest taste of India on plates prepared with contemporary flair.

For the past three years, LUX* Belle Mare – the flagship five-star property of LUX* Resorts & Hotels – has undergone a head-turning transformation, with a light and bright take on Indian Ocean luxury. Peeking out over the palm trees, LUX* Belle Mare’s thatched roofs are typically Mauritian, blending in seamlessly with the rustic charm of the neighbourhood.

For a dash of scintillating Asian fare in a picture-perfect tropical setting, take a seat at the spectacular restaurant Amari, a modern, opulent space with spice-lined walls, carved wooden screens and unforgettable views of the sea.

Deutsche Börse partners with African Stock Exchange

The African Stock Exchange (AFSX) plans to use the technology and support services of Deutsche Börse's Xetra trading venue. The AFSX is a start-up based in Mauritius with the objective of offering securities trading for the whole of Africa. Xetra trading participants will have easier access to the African financial markets in future through the Deutsche Börse infrastructure. Moreover, market participants in Africa will have technical access to a large pan-European trader network. 

“The trading system is based on very stable and reliable technology, and also stands out due to its low latency. This high-level technology used by Deutsche Börse at its own trading venues – Xetra and the Frankfurt Stock Exchange – makes the markets more transparent and secure. Moreover, many venues in Europe already use the trading system successfully, so it is a good choice for the African Stock Exchange and forms a strong foundation for the market launch,” said Hauke Stars, member of the Executive Board and responsible for Information Technology and Market Data + Services at Deutsche Börse.

Dhaneshwar Damry, Chairman of the AFSX said, “a truly pan African stock exchange is vital to develop local entrepreneurship and innovation that will spur job creation and accelerate the development of the African continent. This ground-breaking partnership brings together a team of talented Africans driven by a strong sense of purpose with the technology, trading partners and expertise from Deutsche Börse. The teams at AFSX aspire to contribute to Africa’s rise by establishing the financial gateway to Africa that will in turn strengthen the continent’s domestic exchanges through increased liquidity.”

Deutsche Börse's trading technology is continuously developed further and already used by several exchanges in Europe. The Vienna Stock Exchange introduced it in 1999 and the Irish Stock Exchange in the year 2000. The Bulgarian Stock Exchange followed in 2008, the Ljubljana Stock Exchange in Slovenia in 2010, Malta and Prague in 2012, and the Cayman Islands and Budapest in 2013. The Eurex subsidiary Eurex Bonds also uses the trading system, and it was the basis for the Shanghai Stock Exchange's own trading system.

About Deutsche Börse's electronic trading system for the spot market:

Deutsche Börse's trading system for the spot market provides efficient access to the capital markets, supports the latest trading techniques and provides an ever-growing range of tradable securities. It sets the highest standards in terms of reliability, security, speed and innovation. Approximately 200 participants from partner exchanges and 230 European banks and brokerage firms admitted to the Frankfurt Stock Exchange from 18 countries are connected to the participant network. The network offers the highest levels of liquidity, transparency and cost efficiency. Over 1.1 million securities are currently traded using this technology – more than on any other trading platform.

About the African Stock Exchange:

The African Stock Exchange (AFSX) is the first truly pan African stock exchange that connects international and African investors to African issuers. The team at AFSX are driven African entrepreneurs, committed to forging equitable, inclusive and sustainable growth, both economic and social, for the African people. 

AFSX is leveraging the technology and support services of Deutsche Börse's Xetra trading venue to facilitate connectivity for international trading partners and ensure scalability and seamless execution. AFSX is also dedicated to enforcing world class regulatory standards for issuing companies that are to support investor confidence and ensure capital protection.

AFSX is based in Mauritius, one of the main financial hubs for Africa and benefits from strong support from local and African government bodies. AFSX has applied for a stock exchange license which is subject to the regulatory approval of the Mauritius Financial Services Commission (FSC).

Xetra® is a registered trademark of Deutsche Börse AG.

FSC Mauritius signs MoU with Autorité des marchés financiers (AMF) France

The Financial Services Commission, Mauritius (FSC Mauritius) entered into a Memorandum of Understanding (MoU) concerning consultation, cooperation and exchange of information related to the supervision of Alternative Investment Fund Managers’ Directive (AIFMD) entities with the Autorité des Marchés Financiers (AMF), France with effect from 19 September 2014. The Chief Executive of the FSC Mauritius, Ms Clairette Ah-Hen, signed the MoU in the presence of His Excellency Mr Laurent Garnier, French Ambassador to Mauritius at the FSC House on 14 October 2014.

The AIFMD primarily introduces a number of requirements with the objective to:

a) create a comprehensive and effective regulatory and supervisory framework for Alternative Investment Fund Managers (AIFMs);

b) enhance the transparency of the activities of these AIFMs and their funds (broadly categorised as non-harmonised funds/Alternative Investment Funds (AIFs) in the form of hedge funds, private equity funds and real estate funds amongst others) towards investors and public authorities; and

c) improve the macro-prudential oversight of the sector in the EU.

Upon signing of the MoU, Ms Clairette Ah-Hen, Chief Executive of FSC Mauritius stated that:

“The signature of this MoU came to reaffirm FSC Mauritius commitment to the highest standards of international engagement and information sharing. Strong cultural and emotional links exist between Mauritius and France due to history and current relationship between the two countries. With the signature of this MoU, the FSC Mauritius looks forward to intensify cooperation with France especially in the field of financial services.”

The FSC Mauritius has so far signed 25 MoUs with European Regulators with regards to the supervision of AIFMD entities.

Financial Services Commission, Mauritius

15 October 2014

USA: Prepared Remarks of CFPB Director Richard Cordray at Forum on Access to Checking Accounts

Thank you for joining our forum to explore how consumers are affected by checking account screening policies and practices. Today we will look at how these practices work and raise questions about whether they unfairly block some consumers from opening checking accounts, while exposing other consumers to inappropriate risk. We look forward to a fruitful discussion that advances our understanding of these issues.

Checking accounts are an important part of a consumer’s financial life. They are used by some 200 million Americans, making them one of our most widely used financial products. They function as a basic tool for money management that provides a secure way for consumers to collect earnings, make payments, and transfer and hold funds. People often use them to pay their bills and receive their wages, which is essential to financial viability and economic mobility. Each year, millions of Americans open new checking accounts. They do so for many reasons, such as entering the banking system for the first time, finding a more attractive product or service, or moving to a new part of the country.

When consumers go to a bank or credit union to set up a checking account, they have to provide certain information. In that process, they get screened for different kinds of risk. One risk is whether they have engaged in any fraudulent or illegal conduct, such as money laundering. But banks and credit unions also screen consumers to determine if they pose a credit risk. Now, this might seem counter-intuitive. After all, consumers are opening up a checking account to deposit money and spend it later, none of which would seem to pose any credit risk. But most banks and credit unions also have overdraft policies that allow consumers to have negative balances. So the screening system is used to determine how likely it is that the consumer will incur overdrafts and pay them back.

In their screening for risk, banks and credit unions often rely on reports from consumer reporting agencies. Although many people think that there are only three national credit reporting companies, in fact there are many more specialty consumer reporting agencies that also operate nationwide. They primarily collect and provide specific types of information on a consumer’s history, such as medical payments, tenancy, employment, or insurance claims.

A specialty consumer reporting agency associated with checking account screening, in particular, would have a database of information on involuntary closures of checking accounts, check writing, and checking account history. The reports sold to banks and credit unions can make the difference between a consumer being approved or rejected for a checking account.

Obviously, then, these reports and the related screening processes of banks and credit unions can greatly affect how consumers are treated, which is why we are here today. The Consumer Bureau has three areas of concern. First, we are concerned about the information accuracy of these reports. Second, we are concerned about people’s ability to access these reports and dispute any incorrect information they may find. Third, we are concerned about the ways in which these reports are being used. Let me address each of these issues more specifically.

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First, as these reports play an increasingly important role in people’s lives, we are concerned about the type and accuracy of the information found in them. The specialty consumer reporting agencies typically generate reports focused on information that is primarily derogatory about a consumer. This includes charge-off amounts, past non-sufficient funds activity, unpaid or outstanding bounced checks, overdrafts, involuntary account closures, and fraud.

We are concerned about whether this information contains too many imperfections and inconsistencies. For example, we know that institutions vary in their abilities to conduct the careful investigations needed to differentiate between accountholders who perpetrate fraud versus those who are victims of fraud. In addition, we believe the definitions used to report an involuntary account closure may vary industry-wide on some central points, such as how long a negative balance may go unpaid before it is charged off and the account is closed and reported to the consumer reporting agency. Some institutions may close accounts after money is owed for 30 days; others may not close accounts until money is owed for 120 days. Institutions also vary in how they report account closures to the consumer reporting agencies. Some may report all charge-offs, some may set a threshold of $50 or $100. Timing of reports can also vary, with some reporting more quickly and others more slowly.

Differences can occur on other material points as well. Some banks or credit unions separate out the principal and fees when they report overdue debts; others do not. Some update their reports daily and others monthly. Sometimes charged-off balances are sold as debts or assigned to collectors. And, significantly, depending on how careful and conscientious a bank or credit union may be in passing information along, the quality of its policies and procedures can profoundly affect the accuracy of screening decisions for consumers.

Credit reporting agencies have an obligation to have procedures in place for “maximum possible accuracy.” In the face of these challenges, we are interested in understanding what procedures they follow, and what alternatives are possible. We are also interested in learning how improvements in the way information is furnished to specialty consumer reporting agencies and processed and reported by such agencies for checking account screening can ensure greater consistency and quality in these consumer reports. This in turn would result in better and more informed screening decisions that are fairer to consumers.

We also will be exploring whether better data might enable a financial institution to make more nuanced decisions in account screening rather than simply reaching a binary “yes or no” result. This kind of assessment might provide greater access to the banking system, as we will discuss a bit later.

***

Second, we are concerned about whether consumers are able to readily to access their reports, and whether they are able to get inaccuracies fixed. We are also concerned that most consumers are unaware of how this screening system affects their ability to access a checking account.

A consumer who had an account closed and goes to open a new account at another institution may be utterly unaware of how his or her application will be judged. A financial institution’s qualification process is likely quite opaque. At the Consumer Bureau, we believe it is important for consumers to know why they are turned away. Federal law entitles each of us to know when a consumer report was used to take adverse action against us and to obtain a free copy of information contained in that report from the consumer reporting agency that provided it. In addition, nationwide specialty consumer reporting agencies, including those serving the checking account market, have an obligation under the law to disclose to us a free copy of our file annually upon our request. In November 2012, the Bureau issued a bulletin reminding these specialty consumer reporting agencies of this obligation. We continue to work to make sure consumers know when they have the right to obtain these reports and can exercise this right easily.

When consumers discover inaccuracies, it is important that they have an effective avenue of appeal available for them to challenge those inaccuracies. Federal law entitles them to dispute what they think is wrong and get a prompt resolution of the issue. If consumers cannot take steps to ensure that information about their account history is accurate, they will be unjustly hindered from re-entering or participating effectively in the banking system. That is a concern for us.

We therefore want to explore how consumers are getting information about their right to obtain copies of their reports from specialty consumer reporting agencies and to what extent they are exercising those rights. We likewise want to better understand how consumers are obtaining information about their right to dispute information in those reports and the exercise of those dispute rights as well.

***

Third, we are concerned about how these reports are being used. It is one thing to use a credit report or similar type of consumer report as a means of assuring that consumers do not take on more risk than they can handle. Indeed, the Bureau would be concerned if banks or credit unions were to grant credit to consumers without regard to their prior credit history – as we expressed in the “ability to repay” rule we adopted in the mortgage context. For most consumers, though, checking accounts are not inherently credit vehicles, but instead are products for depositing and transferring funds. So it is troubling then that banks or credit unions may use a credit report to exclude some consumers from these basic financial services.

For consumers who lose their account privileges and are put out of the banking system, they are forced to rely on other ways to manage their financial lives. These alternative financial services, such as check cashing and money orders, often are less convenient, more costly, and have fewer consumer protections. The same is true for consumers who live entirely in a cash economy. The loss of the safer banking product can have serious consequences for consumers’ ability to succeed in managing their financial affairs. One interesting area of innovation involves technology that may lead to improved, low-cost transaction accounts, which do not include any overdraft or other credit feature, and which are accessed either through traditional branch networks, or through alternative channels. As these innovations evolve they may change the dynamic considerably, especially if we can ensure the same kind of robust consumer protections that the law imposes on checking accounts offered by banks and credit unions.

For these reasons, this last question is an interesting and important one. We are especially interested to learn more about how the screening system could be used to help institutions better meet the needs of these consumers, rather than simply excluding them from the banking system altogether.

***

So we are here today to learn more about screening practices for checking accounts and the information they rest on. We will consider how to balance the needs of banks and credit unions with the needs of consumers for access and protection. We are seeking, in particular, to explore ways that account screening can move beyond the use of specialized consumer reports as crude “black lists” where consumers are turned down for an account simply because their name appears on the list.

We envision a process that better understands consumers’ needs and can provide an account that is appropriate to their personal circumstances. Among the questions we will be asking are: How can the screening process be improved to identify consumers who could or should be given second chances at checking accounts? Can checking accounts products be made available to consumers more broadly that minimize risk, thus making screening less important? What improvements can be made to the way information is provided to the specialty credit reporting agencies and is processed and reported by those agencies? And what role can government regulators play in fostering a market that provides appropriate products for all kinds of consumers?

The Consumer Bureau has the authority to supervise the larger depository institutions and the larger consumer reporting agencies for compliance with federal consumer financial protection laws. We are the first federal agency to be in a position to engage directly with both sets of these important industry participants. We have already released several reports on the credit reporting system, including one of the most in-depth looks at it to date. As I mentioned, we have also issued a warning to some specialty reporting companies that federal law requires them to provide consumers with access to their reports. And we issued a consumer advisory informing people that they have a right to obtain their reports from the nationwide specialty consumer reporting companies for free each year. We will continue to research and monitor this market carefully.

In the end, consumers need access to accounts that allow them to move their money around securely and efficiently, giving them control over their financial well-being without exposing them to unwanted or unforeseen risks. The information used to determine their eligibility for an account needs to be accurate so that the account screening process does not unfairly restrict their access to the banking system. We need to move from screening processes designed to make banks safe from consumers to ones designed to make them safe for consumers. Thank you.

FSC Mauritius issues Practice Note on Swaps & Derivatives

This Practice Note:

• (a) explains the concept of swaps and derivatives traded on Over the Counter (OTC) Markets and outlines the scope of regulation and supervision by the Financial Services Commission, Mauritius (FSC Mauritius) as per the present laws of the Republic of Mauritius;
• explicates the manner in which the principles already established under legislation or a guideline will be interpreted and implemented. Practice Notes are issued under Section 7(1) (a) of the Financial Services Act 2007 (FSA 2007);
• needs to be updated following new developments occurring in the financial landscape; and
• (d) has been issued subsequent to discussions with the Mauritius Bankers Association (MBA) to clarify the circumstances to which the law does not require banks to obtain a licence or approval from the FSC Mauritius to engage in derivatives contracts and which are not meant for distribution purposes. It also contains explanations whereby banks will need to take a licence with the FSC Mauritius to trade in ‘Swaps and Derivatives’.