In his recent budget speech, Mauritius' finance minister Xavier-Luc Duval outlined the island's plans for the regulation of its financial sector. These are far-reaching, at least on paper.

In his recent budget speech, Mauritius' finance minister Xavier-Luc Duval outlined the island's plans for the regulation of its financial sector. These are far-reaching, at least on paper.

The government proposes to set up a Serious Fraud Office and a co-ordination committee "among all agencies" to combat financial crime. It wants to redefine the term “financial crime” as an offence under the various existing banking laws, which apparently it is not. This is likely to include a new offence of setting up a pyramid or Ponzi scheme; Mauritius has seen plenty of these lately. Such schemes tend to affect large numbers of high-net-worth individuals of an "entrepreneurial" bent.

There are plans to amend both the Bank of Mauritius Act and the Financial Services Act to strengthen their regulatory measures, transferring the responsibility for the licensing, regulation and supervision of credit unions from the Registrar of Associations to the Bank of Mauritius and the responsibility for money-lenders from the Accountant-General to the Bank also. Additionally, the Bank is to regulate co-operative credit unions that manage funds over a certain threshold.

The minister also stated that the Bank of Mauritius will clamp down on deposit-taking without a licence, using compulsory interviews as a way of doing so, and to issue warning alerts to inform the public of such activity without having to worry about infringing other laws.

The Banking Act's definition of “banking business” is to cover the issuance and acceptance of cheques, i.e. the offering of payment instruments, as a further deterrent to illicit banking. The Act might also be amended to allow the Bank of Mauritius access to data held electronically at this-or-that financial institution to prevent people from tampering with or hiding various important types of information. The Bank is to have the power to grant approval to foreign banks to open representative offices in Mauritius. It is also to register, de-register and regulate dealers in the foreign exchange market.

There is also to be an extension of the powers of the Financial Services Commission (FSC) to enable it to investigate anyone - and not just its own licencees or entities that ought to be licensed - for breaking the laws that it administers.

The Data Protection Act is to be "amended to allow an investigatory authority under the Financial Intelligence and Anti-Money Laundering Act to be provided with data held at the Records Office with regard to convictions of persons suspected of money laundering offences while pursuing a money-laundering investigation." At the moment, such data is classified as “sensitive personal data” and therefore, presumably, out of bounds for investigators.

Other regulatory, law-enforcing and public bodies are to be allowed to have access to the Mauritius Credit Information Bureau's information for profile-checking and other things.

The Financial Intelligence and Anti-Money Laundering Act is to be amended to allow every supervisory authority in Mauritius to have access to a copy of a relevant suspicious transaction report as long as this is consisent with its existing compliance functions.

The duty of confidentiality imposed under Section 64 of the Banking Act shall not apply where information is required by the central bank for the purpose of assisting the FSC in the discharge of its functions or obligations. This is required by the International Organisations of Securities Commissions (IOSCO).

The Financial Services Commission of Mauritius, the Indian Ocean jurisdiction's integrated financial regulator, signed the IOSCO Africa Middle East Regional Committee Memorandum of Understanding on 18 September at the IOSCO Annual Conference in Luxembourg. It proclaimed this to be the first step on the road to a new era in inter-regualtory co-operation.

The financial services sector as a whole remains one of the most important economic pillars of the economy with a sustained GDP contribution of over 10% and an average growth of 4.8% over the last 3 years. Africa Investor, the advisory group, recently voted Duval best finance minister in Africa for the second year running.