New Delhi: Mauritius plans to provide more teeth to its financial market regulator and is also setting up a Serious Fraud Office to combat financial frauds, apparently taking a leaf out of the Indian regulatory framework.
The island nation with a significant Indian-origin population has also proposed to set up a Coordination Committee among all agencies combating financial crime.
In another apparent takeaway from Indian regulations, Mauritius has asked resident societies in its country to spend 2 per cent of their profits on social welfare activities.
Besides, like steps taken recently by India, it too plans to put in place stronger checks and balances to address the rising menace of ‘ponzi schemes’.
Mauritius, one of the biggest sources of foreign direct investments into India, has made these proposals in its national budget for 2014. The country’s Vice Prime Minister and Finance Minister Xavier Luc Duval presented the budget, whose theme was ‘building a better Mauritius’, last week.
Among others, the Mauritius government has proposed to increase the powers of its market regulator Financial Services Commission (FSC) to carry out investigation.
FSC is the integrated regulator for all non-banking financial services and global businesses in Mauritius and has a role similar to the Securities and Exchange Board of India (Sebi), which has recently been given greater powers to crackdown on market manipulators.
Considered as first of its kind, India’s new Companies Act also requires certain companies to shell out at least two per cent of their three-year average net profit for CSR work.
The island nation’s budgetary proposals come at a time when the two nations are re-negotiating their taxation treaty.
Discussions to amend the tax pact have been hanging fire for many months amid India’s apprehensions that the pact is being misused to route unaccounted money and evade taxes.
While Mauritius maintains it has strict checks and balances in place, uncertainties over the tax treaty have adversely affected investment flows between the two countries.
Presenting the budget, Duval said that Mauritius will set up a Serious Fraud Office and a Coordination Committee among all agencies combating financial crime, with an aim to strengthen the country’s regulatory framework.
Besides, it will redefine the term ‘financial crime’ to capture offences under various existing Acts and banking laws and extend the powers of FSC to enable it to investigate breach of laws under its administration by any person instead of only its licensees or persons ought to be licensed.
In the wake of recent Ponzi scams, the budget provides for amendments to strengthen legal framework and deter fraudulent persons to carry out illicit activities. Besides, the country’s Criminal Code will be amended to prohibit the conduct of Ponzi and pyramid schemes, the budget has proposed.
The Bank of Mauritius is also being empowered to issue issue warning alerts to inform the public of the companies which may be taking deposits without a licence.