Mauritius is a rapidly and constantly growing economy, mainly due to the growth of its financial services sector. Due to its strategic location in the Indian Ocean, Mauritius acts as a bridge for business between Asia (mainly India) and other parts of the world, especially Africa. Furthermore, Mauritius benefits from regional cooperation framework in both Asia and Africa.

The licensing and supervision of Investment Dealers is entrusted to the Financial Services Commission (“FSC”). The FSC is highly regarded both within the industry and by peer regulators internationally. It is known for its rigorous regulatory standards, commitment to transparency, and effective enforcement of compliance. The FSC is also an active member of several international organizations, including the International Organization of Securities Commissions (IOSCO), which further enhances its credibility. The FSC’s regulatory approach is viewed as balanced, fostering both innovation and stability in the financial sector.

For all of the above mentioned reasons, those seeking to establish their offshore financial activity in a jurisdiction providing a mixture of robust regulatory framework, a politically stable environment along with skilled service providers at affordable costs, should heavily consider Mauritius.

For those seeking to offer derivatives such as Contracts for Differences (CFDs), the Investment Dealer license is one of the best available options nowadays.

The licensing and supervision of Investment Dealers is in the hand of the FSC under the Financial Services Act 2007.

The Investment Dealer regulatory framework is divided into several license categories, each carrying a different scope of activities and requirements.

The license categories are:

Investment Dealer (Full Service Dealer including underwriting):

• • Scope: This license allows the holder to execute orders on behalf of clients, manage portfolios of securities, give advice on securities transactions, and act as a market maker. In addition, license allows the holder to underwrite securities issues.
  • Requirements:
    • Minimum stated capital of MUR 10 million (approx. $214,000 USD).
    • Compliance with additional prudential requirements related to underwriting activities.
    • Detailed submissions similar to the first category, including more extensive risk management policies.

Investment Dealer (Full Service Dealer excluding underwriting):

• • Scope: This license allows the holder to execute orders on behalf of clients, manage portfolios of securities, give advice on securities transactions, and act as a market maker.
  • Requirements:
    • Minimum stated capital of MUR 1 million (approx. $21,000 USD).
    • Adequate operational infrastructure and qualified personnel.
    • Submission of a detailed business plan, risk management policies, and AML/CFT procedures.

Investment Dealer (Broker):

• • Scope: This license is limited to executing orders on behalf of clients and advising on securities without the ability to underwrite or act as a market maker.
  • Requirements:
    • Minimum stated capital of MUR 700,000 (approx. $15,000 USD).
    • Adequate infrastructure and personnel as per the FSC’s guidelines.
    • Submission of relevant documentation including business plan, AML/CFT procedures, and compliance framework.

Investment Dealer (Discount Broker):

• • • • Scope: This license is limited to executing orders on behalf of clients without the ability of advising on securities (an execution brokerage only).
      • Requirements:
        • Minimum stated capital of MUR 600,000 (approx. $13,000 USD).
        • Adequate infrastructure and personnel as per the FSC’s guidelines.
        • Submission of relevant documentation including business plan, AML/CFT procedures, and compliance framework.

Main Requirements for an Investment Dealer License

The requirements for each Investment Dealer license category generally include the following:

• Capital Requirements: As detailed above, capital requirements vary depending on the scope of activities.
• Operational Infrastructure: Applicants must demonstrate that they have the necessary technological and human resources to conduct the activities for which they are licensed.
• Qualified Personnel: Key personnel must possess relevant qualifications and experience in financial services.
• Compliance and AML/CFT: Robust Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) policies must be in place.
• Business Plan: A comprehensive business plan outlining the proposed activities, target market, risk management policies, and financial projections.
• Professional Indemnity Insurance – Every Investment Dealer licensee must arrange for an appropriate professional indemnity insurance.

Timelines for Application and Licensing

The typical timeline for preparing an application and obtaining a license from the FSC includes:

• Preparation: It generally takes 2-3 months to gather all necessary documents, draft the required submissions, and complete the application.
• Regulatory Review: The FSC typically takes 3-6 months to review and process an application, though this can vary depending on the complexity of the application and any additional information the FSC may require.
• Total Timeline: The entire process, from preparation to licensing, can take anywhere from 5 to 9 months.

Comparison to other jurisdictions

In comparison to jurisdictions such as the Cayman Islands, the British Virgin Islands and the Bahamas, Mauritius is a lenient and affordable jurisdiction, without compromising on the quality of its regulatory framework and professional service providers. Indeed, the costs of professional services in the Cayman Islands, the British Virgin Islands and the Bahamas are much higher than in Mauritius. This means that both set up costs and ongoing operational expenses in any of these three jurisdictions will be significantly higher than in Mauritius.

Furthermore, the capital requirements in these three jurisdictions pose a significant entry barrier to those seeking to set up their operations there. The capital requirement in the Cayman Islands ($100,000 KYD, approx.$120,000 USD), the Bahamas ($300,000 USD) and the British Virgin Islands ($1M USD) are high enough to deter many.

Mauritius also allows a straightforward and lenient regulatory framework when it comes to trading, as there are no trading limitations such as leverage limitations in Mauritius. In contrast, the Money Broking license in Labuan, Malaysia’s special economic zone, impose several limitations such as the possibility to offer trading on FX products only (no shares, indices or commodities) and a maximum leverage ratio of 1:100.

Conclusión

Mauritius offers a robust regulatory framework for Investment Dealers, supported by a reputable financial regulator. The country’s position as a financial hub makes it an attractive jurisdiction for businesses seeking to establish or expand their presence in the region. The various license categories under the Investment Dealer framework provide flexibility for firms of different sizes and scopes, while the FSC ensures a stable and compliant operational environment.

Other solutions in Mauritius

Mauritius recently granted the first licenses under its regulatory framework for Virtual Assets Services Providers (VASPs), aligning itself with leading offshore financial centers such as the Cayman Islands and Bermuda.

Mauritius also allows for the licensing of payment services providers and other payments and investment vehicles.

Should you require further details or assistance with setting up your Investment Dealer, VASP or payment operation in Mauritius, or unsure if Mauritius can cater your planned activities, please do not hesitate to contact us.

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