Mauritius corporate governance changes for management companies [October 2021]

The FSC 2018 corporate governance Circular Letter CL280218 has been revoked and superseded by Circular Letter CL281021 issued by the FSC on 28 October 2021.

• https://www.fscmauritius.org/media/115773/circular-letter-corporate-governance.pdf

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),