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’.