Preserve the Integrity of Financial System at Mauritius

"Making Mauritius a financial center is not an easy task." Xavier-Luc Duval, Minister of Finance, who recalled last week during a conference organized by the BOI themed “Roadmap to the future: Mauritius as a regional building financial and business center “. Indeed, it takes some time to establish a reputation and see them grow as a regional financial center. It is only at this price that will attract honest professionals operating in this sector. The jurisdiction, existing laws and economic stability are all factors that must be addressed investors. However, recent scandals alleged fraud - WhiteDot case, the Sunkai case and most recentthe case Je t’Aime Marketing - prompted the authorities to sound the alarm.

What is the responsibility of regulators and what is the gauge to measure the effectiveness and efficiency of our financial markets? Often confusion appears about the role of the financial system. Financial market normally includes an architecture developed without being too complex. It promotes savings and channeled to projects that benefit the most in all economic agents. This system includes a risk-taking while allowing adequate remuneration and adequate capitalization of financial institutions. The transfer of capital takes place through brokers, traders, commodity exchanges and insurers. Anyway, this is the confidence that establishes the integrity of the financial system.

The 'hedgers' must find their accounts to mitigate their risks when investing. However, the information remains the centerpiece. The companies must have financial reporting to help investors make assessments of securities and other financial instruments. This is so that operators have confidence in the markets. Note that at this level, Mauritius offers a diverse range of financial services, with local and international banks, 15,000 qualified professionals in finance, insurance, etc.. The laws are constantly updated with the Limited Partnerships Act recently, the Foundation Act, the Private Pension and Non-treaty based funds. Other laws relating to the Limited Liability come, the Regional Treasury and Regional Headquarters. The Banking Amendment Bill will, in fact, voted this week to more stability and flexibility for banks operating in Mauritius.

The reputation of a jurisdiction is dependent on its image internationally. Maurice is stepping up efforts to defend its image. Regulators are working in this direction, including the Financial Services Commission (FSC) and the Bank of Mauritius (BoM). Mauritian offshore jurisdiction meets the strict criteria of the OECD.

Mauritius is a low-tax jurisdiction but regulated. The regulation of financial markets lays with the State and associations and public and private organizations, which are responsible for regulating the activities of those markets and financial intermediaries. It must be noted with regret that without effective regulatory system, some financial intermediaries not hesitate to deceive investors. The probability of being cheated is much higher when the financial system is complex. It is therefore the duty of regulators to protect investors against fraud.

"The key is transparency"

Kee Chong Li Kwong Wing, economist and member MMM, recalls that transparency and regulation are needed in the financial markets. "Trust is the basis of any transaction," he said. The integrity of the financial market depends on the total transparency. Financial instruments should be well regulated and all operators in the financial sector must be licensed. "It's not as if you sell any other product. Advisors and experts, who deal with financial instruments, must be 'fit and proper' and qualified. "There are also rules to follow. "You can not sell financial products that run into bankruptcy. Information on financial products must be clear and true. "Kee Chong Li Kwong Wing who has a long experience in financial markets states that" before a customer buys a financial product, we must give him a time reflection. As is done for insurance, etc.. "" The key is transparency and regulation. Without these two elements, it is theft. "