News

Mauritius corporate governance changes for management companies [October 2021]

04/01/2022

The FSC 2018 corporate governance Circular Letter CL280218 has been revoked and superseded by Circular Letter CL281021 issued by the FSC on 28 October 2021.

The 28 February 2018 FSC Circular Letter [CL280218] required management companies to apply the National Code of Corporate Governance [https://nccg.mu/full-code]:-

  • Paragraph 3.2.1 thereof provided, among other things that:
    • Subject to paragraph 3.2.2, the Code shall also be applicable to all licensees of the Financial Services Commission (‘FSC’) providing financial services, including Management Companies.

However, the 2021 change means a carve-out may exist.

The FSC issued the 2021 Circular Letter CL281021 on 28 October. And Paragraph 4.2.1 of CL281021 provides, among other things that

  • The Code shall also be applicable to Management Companies falling under the definition of
    • Public Interest Entity as defined under the Financial Reporting Act having similar features as the category of licensee identified under paragraph 4 of the First Schedule of the Financial Reporting Act.”

Paragraph 4 of the First Schedule of Financial Reporting Act provides:

  • Any company which has, during 2 consecutive preceding years, at least one of the following —
    • An annual turnover exceeding 500 million rupees: or
    • Total assets exceeding 500 million rupees.
  • Any group company which has, during 2 consecutive preceding years, at least one of the following –
    • An annual turnover exceeding one billion rupees; or
    • Total assets exceeding one billion rupees.

Furthermore, CL281021 provides that:-

  • “Where a licensee of the FSC has an obligation to comply with the Code under
    • The Financial Reporting Act,
    • The Companies Act,
    • The relevant Acts or
    • Any other enactment(s),
  • It should ensure compliance with the Code.

So, where CL280218 applied to all Management Companies, under CL281021, should a management company not fall within the criteria set out in the following, the Code will not apply

  • Paragraph 4 of the First Schedule of Financial Reporting Act or
  • The Companies Act,
  • The relevant Acts or
  • Any other enactment(s),
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