Securities Act

Securities (Authorisation of Foreign Investment Dealers) Rules 2010

[GN 178 of 2010 – 18 September 2010] [Section 29(3)]

PART I – PRELIMINARY

1. Citation

These rules may be cited as the Securities (Authorisation of Foreign Investment Dealers) Rules 2010.

2. Interpretation

In these rules –

"Act" means the Securities Act;

"applicant" means a foreign investment dealer applying for authorisation to act as an investment dealer in Mauritius;

"Chartered Secretary" means a member of the Institute of Chartered Secretaries and Administrators of the United Kingdom;

"clearing member" means a person who is authorised to clear and settle trades executed on a relevant securities exchange;

"foreign investment dealer" means a financial institution which is licensed, regulated, approved, recognised or otherwise authorised to perform in a foreign jurisdiction the functions of an investment dealer as set out in section 29 of the Act;

"foreign investment dealer agent" means an agent appointed by a foreign investment dealer in accordance with rule 6;

"law practitioner" has the same meaning as in the Law Practitioners Act;

"management company" has the same meaning as in the Financial Services Act;

"qualified auditor" has the same meaning as in the Companies Act;

"relevant Acts" has the same meaning as in the Financial Services Act.

3. Scope of rules

These rules shall apply to the authorisation of foreign investment dealers whose activities shall be restricted to trading on a securities exchange.

PART II – AUTHORISATION OF FOREIGN INVESTMENT DEALERS

4. Application for authorisation

(1) No foreign investment dealer shall deal on a securities exchange unless authorised by the Commission.

(2) A foreign investment dealer may carry out the functions and activities of an investment dealer if authorised by the Commission in accordance with these rules.

(3) The Commission may authorise the applicant to act as an investment dealer if the Commission is satisfied that the applicant is exercising the functions of an investment dealer in a jurisdiction where there is a regulatory or supervisory framework consistent with international best practice.

(4) An application for authorisation shall be accompanied by –

 (a) a statement from the relevant securities exchange that the foreign investment dealer will be admitted to deal on the securities exchange if authorised by the Commission;

 (b) a certified true copy of the agreement entered between the foreign investment dealer and the foreign investment dealer agent;

 (c) a certified true copy of the business licence of the applicant;

 (d) either a certificate of good standing from the relevant foreign regulatory body, if the applicant is licensed or a statement from a lawyer authorised to practise law in the foreign jurisdiction certifying that the applicant is legally entitled to carry out the functions of an investment dealer in that jurisdiction, if the applicant is not licensed;

 (e) a certified true copy of the certificate of incorporation of the applicant;

 (f) a list of the documents submitted by the applicant to the relevant securities exchange; and

 (g) any other information that the Commission may determine.

PART III – DUTIES OF SECURITIES EXCHANGE

5. Duties of securities exchange

The relevant securities exchange shall –

(a) conduct all due diligence check's in relation to the applicant and provide the Commission with an undertaking to this effect;

(b) monitor the conduct of the business of the applicant and report to the Commission, where appropriate;

(c) ensure that the settlement of all trades executed by the applicant shall be made through clearing members; and

(d) exercise such other duties in relation to the foreign investment dealer, as the Commission may determine from time to time.

PART IV – FOREIGN INVESTMENT DEALER AGENT

6. Foreign investment dealer agent

(1) A foreign investment dealer authorised to act as an investment dealer shall at all times maintain a foreign investment dealer agent in Mauritius who shall be a law practitioner, a qualified auditor, a Chartered Secretary or a management company.

(2) An applicant shall enter into an agreement with a foreign investment dealer agent prior to the application for authorisation with the Commission.

7. Functions of foreign investment dealer agent

A foreign investment dealer agent shall provide such services as an applicant may require in Mauritius and these services shall include –

(a) the filing of all documents with the Commission as may be required under the relevant Acts;

(b) the receiving and forwarding of any communication, notice or summons from, and to, the Commission or the relevant securities exchange or any other party; and

(c) the notification of any change in the beneficial ownership of the applicant, any alteration to any document submitted to the Commission or the relevant securities exchange by the foreign investment dealer, and any other material change within 21 days.

PART V – MISCELLANEOUS

8. Fees

The applicant shall pay the appropriate fees specified in the Financial Services (Consolidated Licensing and Fees) Rules 2008.

9. Duration and variation of the authorisation

(1) The authorisation granted by the Commission shall cease to be valid if the foreign investment dealer is no longer permitted to act as an investment dealer in the jurisdiction where it was operating as such at the time of the application.

(2) The Commission may vary the terms of the authorisation as it may determine.

10. - 11.  –

_______________

Securities (Brokerage Fees for Debentures) Rules 2013

[GN 322 of 2013 – 1 January 2014] [Section 155]

1. These rules may be cited as the Securities (Brokerage Fees for Debentures) Rules 2013.

2. In these rules –

"debentures" means a written acknowledgment of indebtedness issued by a company in respect of a loan made or to be made to it, or of money deposited or to be deposited with the company, or of the existing indebtedness of the company, whether constituting a charge on any assets of the company or not, and includes debenture stock and bonds.

3. (1) Every person who enters a transaction in respect of debentures on the SEM shall pay to the investment dealer the appropriate total brokerage fee specified in the Schedule.

(2) The total brokerage fee paid under paragraph (1) shall be apportioned among the investment dealer, the SEM, the Commission and the CDS –

 (a) where the transaction value exceeds or equals to 75,000 rupees, in accordance with Part I of the Schedule; or

 (b) where the transaction value does not exceed 75,000 rupees, in accordance with Part II of the Schedule.

4. 

_______________

SCHEDULE

[Rule 3]

PART I – FOR TRANSACTION VALUE ON DEBENTURES WHICH
EXCEEDS OR EQUALS TO 75,000 RUPEES

Investment Dealer

SEM

Commission

CDS

Total brokerage fee claimed for apportionment

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

0.0725%0.0125%0.0025%0.0125%0.10%

PART II – FOR TRANSACTION VALUE ON DEBENTURES WHICH DOES NOT
EXCEED 75,000 RUPEES

Investment Dealer

SEM

Commission

CDS

Total brokerage fee claimed for apportionment

(Rs)(Rs)(Rs)(Rs)(Rs)
5592975

_______________

Securities (Brokerage Fee for Government of Mauritius Securities and Bank of Mauritius Securities) Rules 2011

[GN 217 of 2011 – 1 January 2012] [Section – 155]

1. These rules may be cited as the Securities (Brokerage Fee for Government of Mauritius Securities and Bank of Mauritius Securities) Rules 2011.

2. In these rules –

"Bank of Mauritius Securities" means Bank of Mauritius securities issued under section 6(1) (m) of the Bank of Mauritius Act;

"Government of Mauritius Securities" means –

(a) Government securities as defined in section 2 of the Public Debt Management Act; and

(b) any other securities issued by or on behalf of the Government of Mauritius;

"Primary dealer" means a Primary dealer appointed under section 6(1)(x) of the Bank of Mauritius Act and dealing in Bank of Mauritius Securities or Government of Mauritius Securities.

3. (1) Every person who enters into a transaction on a securities exchange in respect of Government of Mauritius Securities or Bank of Mauritius Securities, as the case may be, shall pay to an investment dealer the appropriate total brokerage fee specified in the Schedule.

(2) The total brokerage fee paid under paragraph (1) shall be apportioned –

 (a) where the total brokerage fee is payable to an Investment Dealer (Government of Mauritius Securities and Bank of Mauritius Securities Segment), among the relevant securities exchange, the CDS and the Commission in accordance with Part I of the Schedule;

 (b) where the total brokerage fee is payable to an investment dealer other than an Investment Dealer (Government of Mauritius Securities and Bank of Mauritius Securities Segment), among the investment dealer, the relevant securities exchange, the CDS and the Commission in accordance with Part II of the Schedule.

(3) Paragraph (1) shall not apply to –

 (a)  the Bank of Mauritius; and

 (b) a Primary Dealer.

4. 

_______________

SCHEDULE

[Rule 3(2)]

PART I – TOTAL BROKERAGE FEE PAYABLE TO AN INVESTMENT DEALER
(GOVERNMENT OF MAURITIUS SECURITIES AND BANK OF MAURITIUS
SECURITIES SEGMENT)

Value of transactionSecurities exchangeCDSCommissionTotal brokerage
fee
(Rs)(Rs)(Rs)(Rs)(Rs)
Not exceeding 5 million22522550500

More than 5 million but not exceeding 10 million

4504501001,000

More than 10 million but not exceeding 15 million

6756751501,500

More than 15 million but not exceeding 20 million

9009002002,000

More than 20 million

1,1251,1252502,500

PART IITOTAL BROKERAGE FEE PAYABLE TO AN INVESTMENT DEALER OTHER
THAN AN INVESTMENT DEALER (GOVERNMENT OF MAURITIUS
SECURITIES AND BANK OF MAURITIUS SECURITIES SEGMENT)

Value of
transaction

Investment dealer

Securities exchange

CDS

Commission

Total brokerage fee

(Rs)(Rs)(Rs)(Rs)(Rs)(Rs)
Not exceeding 5 million323808017500

More than 5 million but not exceeding 10 million

646

160

160

34

1,000

More than 10 million but not exceeding 15 million

969240240511,500

More than 15 million but not exceeding 20 million

1,292

320

320

68

2,000

More than 20 million

1,615400400852,500

_______________

Securities (Brokerage Fees for Turnaround Trades) Rules 2013

[GN 295 of 2013 – 12 December 2013] [Section 155]

1. These rules may be cited as the Securities (Brokerage Fees for Turnaround Trades) Rules 2013.

2. In these rules –

"trade" or "transaction" means any purchase or sale of a security conducted via the Automated Trading System of the SEM;

"turnaround trades" means a pair of opposite trades executed by an investor on the same security for the same quantity or less before the settlement date of the first trade executed in the pair of opposite trades and through the same investment dealer.

3. (1) Every person who enters a transaction in respect of turnaround trades on the SEM shall pay to the investment dealer the appropriate total brokerage fee specified in the Schedule.

(2) The total brokerage fee paid under paragraph (1) shall be apportioned among the investment dealer, the SEM, the Commission and the CDS –

 (a) where the transaction value exceeds or equals to 50,000 rupees, in accordance with Part I of the Schedule; or

 (b) where the transaction value does not exceed 50,000 rupees, in accordance with Part II of the Schedule.

4. 

_______________

SCHEDULE

[Rule 3]

PART I – FOR TRANSACTION VALUE ON TURNAROUND TRADES WHICH
EXCEEDS OR EQUALS TO 50,000 RUPEES

Investment Dealer

SEM

Commission

CDS

Total brokerage fee claimed for apportionment

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

Percentage of transaction value

0.10%

0.025%

0.005%

0.02%

0.15%

PART IIFor transaction value on turnaround trades
which does not exceed 50,000 rupees

Investment Dealer

SEM

Commission

CDS

Total brokerage fee claimed for apportionment

(Rs)

(Rs)

(Rs)

(Rs)

(Rs)

50

12.50

2.50

10

75

________________

Securities (Brokerage Fees for Exchange Traded Funds on Foreign Underlyings)
Rules 2013

[GN 179 of 2013 – 15 July 2013] [Section 155]

1. These rules may be cited as the Securities (Brokerage Fees for Exchange Traded Funds on Foreign Underlyings) Rules 2013.

2. In these rules –

"asset" includes indices, commodities, currencies or any other asset acceptable to a securities exchange;

"exchange traded funds" means fully funded and unleveraged securities that –

(a) are listed on a securities exchange; and

(b) track the performance of a specified security or of an asset or group of assets;

"foreign underlying" means –

(a) a security or group of securities issued by a foreign issuer; or

(b) an asset or group of assets held in a foreign jurisdiction, including assets that are not listed on a securities exchange in Mauritius.

3. (1) Every person who enters into a transaction on a securities exchange in respect of exchange traded funds on foreign underlyings shall pay to an investment dealer the appropriate total brokerage fee specified in the Schedule.

(2) The total brokerage fee paid under paragraph (1) shall be apportioned among the investment dealer, the securities exchange, the Commission and the CDS in accordance with the Schedule.

4. 

–––––––––––––––

SCHEDULE

[Rule 3]

TOTAL BROKERAGE FEE PAYABLE IN RESPECT OF EXCHANGE TRADED FUNDS
ON FOREIGN UNDERLYINGS

Investment dealer

Securities Exchange

The Commission

CDS

Total brokerage fee claimed for apportionment

% of transaction value

% of transaction value

% of transaction value

% of transaction value

% of transaction value

0.21

0.07

0.014

0.056

0.35

_______________

Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008

[GN 78 of 2008 – 28 September 2007] [Section 154]

PART I – INTERPRETATION AND EXEMPTIONS

1. Citation

These regulations may be cited as the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.

2. Interpretation

"Act" means the Securities Act;

"CIS manager" means the board of the collective investment scheme when that scheme is constituted as a company or the CIS manager if that particular function has been delegated to the CIS manager by the board;

"contractual plan" means a plan under which an investor undertakes to make periodic investments in a collective investment scheme where the investor has the ability to terminate the plan at any time;

"custodian agreement" means any agreement relating to the appointment and functions of the custodian to which the collective investment scheme or the CIS manager and the custodian are parties;

"expert fund" means a fund which is only available to expert investors;

"FSC rules" means rules made by the Commission under the Act and the Financial Services Act;

"global scheme" means a company, a trust or any other legal entity approved by the Commission, holding a Category 1 Global Business Licence and authorised to carry out activities falling within the definition of a collective investment scheme;

"illiquid asset" means an asset that may not be readily disposed of through market facilities on which public quotations are widely available, at an amount at least equal to the amount at which the asset is valued in calculating the net asset value, or a restricted security, the resale of which is prohibited for any reason;

"participant or shareholder" means a person who holds shares in a collective investment scheme;

"professional collective investment scheme" has the meaning assigned to it in regulation 75;

"promoter" means a person who, whether, acting alone or in conjunction with one or more other persons, directly or indirectly, takes the initiative in founding, organising or substantially reorganising a collective investment scheme;

"scheme" means a collective investment scheme;

"self-managed scheme" means a company managing its own scheme as approved by the Commission under section 103 of the Act and pursuant to regulation 30(2);

"shares" mean the participating interest of a person in a collective investment scheme irrespective of its legal form.

3. Application of these regulations

(1) Except where otherwise expressly provided, these regulations shall apply to all collective investment schemes, including global schemes, which have been authorised by the Commission.

(2) Nothing in these regulations shall be taken as derogation from any condition and requirement which a global scheme may have under its Category 1 Global Business Licence or under an application made for a Category 1 Global Business Licence.

4. Investment clubs

(1) An investment club shall be exempted from these regulations where –

 (a) it does not have more than 30 participants;

 (b) it does not issue debt securities;

 (c) except for normal brokerage commissions, it does not pay any remuneration to securities advisers, CIS managers, investment advisers and portfolio managers;

 (d) all of its participants are required to make proportionate contributions to finance its operations;

 (e) it establishes rules of operation approved by the participants of the club;

 (f) it does not make any public solicitation for participants; and

 (g) a copy of its rules of operation is filed with the Commission.

(2) For the purposes of paragraph (1) –

 "investment club" means an association or a grouping of investors constituted in accordance with the Stock Exchange (Investment Clubs) Rules 1994.

PART II – TYPES OF COLLECTIVE INVESTMENT SCHEMES (CIS)

5. Legal form of collective investment schemes

(1) A collective investment scheme may be constituted –

 (a) as a company limited by shares;

 (b) as a trust; or

 (c) in any other legal form approved by the Commission.

(2) The constitutive documents of any collective investment scheme shall include –

 (a) provisions for the matters specified in the First or Second Schedule, as may be applicable;

 (b) subject to these regulations, the conditions for the replacement of the CIS manager, the custodian, a member of the board of directors, a trustee or a member of the governing body; and

 (c) relevant provisions to ensure the protection of interests of participants in the event of a replacement under paragraph (b).

PART III – LICENSING, AUTHORISATION AND APPROVAL

Sub-Part A – Licensing – Cis Managers and Custodians

6. CIS manager

(1) A CIS manager holding a licence issued by the Commission shall be a body corporate which –

 (a) shall be incorporated or registered and have its place of business in Mauritius;

 (b) is engaged solely in the business of management of collective investment schemes or private pension schemes under the Private Pension Schemes Act, unless otherwise authorised under regulation 32(1).

(2) An application for a CIS manager licence under section 98 of the Act shall be filed with the Commission and shall be accompanied by –

 (a) the constitutive documents of the applicant;

 (b) a detailed description of how the applicant intends to comply with the Act, including any regulations and rules made thereunder;

 (c) information that demonstrates that it has suitably qualified staff with the appropriate expertise and experience to carry out the functions of a CIS manager;

 (d) the personal questionnaire form set out in the FSC rules for every officer or proposed officer, controller, shareholder and beneficial owner of the CIS manager;

 (e) a list of the persons responsible for the management of securities portfolios of the collective investment schemes under management and the competence of these persons;

 (f) the audited financial statements of the applicant as at the last balance sheet date; and

 (g) the fees specified in FSC rules.

(3) Notwithstanding paragraphs (1) and (2), a global scheme may, subject to the approval of the Commission, appoint and retain a CIS manager established in a foreign jurisdiction.

[Reg. 6 amended by s. 57 of Act 15 of 2012 w.e.f. 1 November 2012; reg. 3 of GN 197 of 2013 w.e.f. 10 August 2013.]

7. Custodian

(1) Subject to paragraph (3), a person wishing to hold the assets of a collective investment scheme for safe keeping shall apply to the Commission for a custodian licence under section 100 of the Act.

(2) The application for a custodian licence shall include –

 (a) the constitutive documents of the applicant;

 (b) the audited financial statements of the applicant as at the last balance sheet date;

 (c) the list of collective investment schemes for which the applicant proposes to act as custodian;

 (d) except where the applicant is a bank, the personal questionnaire form set out in the FSC rules for every officer or proposed officer, controller, shareholder and beneficial owner of the custodian;

 (e) the fees specified in FSC rules; and

 (f) any other information or document requested by the Commission.

(3) Every person applying for a custodian licence as a trust company established as a subsidiary of a bank, or as a trustee of a trust, shall have and maintain a minimum stated unimpaired capital of 10 million rupees or an equivalent amount.

(4) Notwithstanding paragraphs (1) to (3), a global scheme may, subject to the approval of the Commission, appoint and retain a custodian established in a foreign jurisdiction.

Sub-Part B – Authorisation – Collective Investment Schemes

8. Application of this Sub-part

For the purpose of this Sub-part, regulations 9 and 10 shall not apply to an application for authorisation as a global scheme.

9. Application for authorisation

(1) An application to the Commission for the authorisation of a collective investment scheme under section 97 of the Act shall be made by the CIS manager or proposed CIS manager, or by the promoter of the CIS, in accordance with this Sub-part and such FSC rules as may be applicable.

(2) Where the scheme has the legal form of a trust, the application shall be made jointly by the CIS manager or the proposed CIS manager, and the trustee.

(3) An application under this Sub-part shall contain the information specified in the Third Schedule and be accompanied by –

 (a) the constitutive documents of the scheme;

 (b) the prospectus prepared in accordance with the Fourth Schedule;

 (c) the personal questionnaire form, set out in the FSC rules, which shall be completed by every officer of the collective investment scheme;

 (d) the fees specified in FSC rules.

(4) Unless such information is already included in the prospectus referred to in paragraph (3)(b), the application shall also be accompanied by –

 (a) a memorandum describing the functions and duties of the CIS manager, and where the CIS manager has delegated such functions and duties under regulation 18 to third parties, by a description and a copy of the contract delegating functions and duties to the third parties;

 (b) the letter of acceptance of the custodian to act as such;

 (c) information concerning the auditor to be appointed;

 (d) the audited annual financial statements as at the last balance sheet date of the CIS manager or, where applicable, a certificate signed by the CIS manager to the effect that such financial statements have already been filed with the Commission; and

 (e) the audited financial statements as at the last balance sheet date of the custodian or, where applicable, a certificate signed by the custodian to the effect that such financial statements have already been filed with the Commission.

(5) The Commission may require the applicant to furnish such additional information as it considers appropriate to process the application.

10. Conditions for authorisation

(1) The Commission may authorise a collective investment scheme under section 97(5) of the Act where –

 (a) the scheme is established or incorporated under the laws of Mauritius;

 (b) the scheme has both a CIS manager and a custodian or, for a self-managed scheme, the scheme has a custodian;

 (c) the constitutive documents and the prospectus or offer documents of the scheme comply with these regulations and any relevant rules;

 (d) the officers of the scheme are fit and proper persons; and

 (e) the requirements under regulation 11 as regard minimum funding are met.

(2) The Commission may recognise a scheme constituted in a foreign jurisdiction provided the scheme –

 (a) furnishes documentary evidence of its constitution, establishment and good standing in the relevant jurisdiction, including complete details of the authoritative body having the regulatory and supervisory functions in the jurisdiction the scheme is established; and

 (b) meets the requirements of these regulations as the Commission considers applicable.

(3) An authorisation under section 97(5) of the Act may be granted subject to such terms and conditions the Commission may consider necessary or desirable for the protection of participants.

11. Minimum funding

(1) The prospectus of a scheme shall specify that the scheme shall receive a minimum amount of subscriptions of at least 5 per cent of the total amount to be raised from investors so as to begin operating the scheme, or such higher amount as may be disclosed in its prospectus.

(2) Where the minimum amount of subscriptions indicated in the prospectus is not reached during the first 6 months of the offering period, the funds shall be returned to the investors together with any interest earned thereon, unless the collective investment scheme can justify a request for extension and the Commission agrees to such an extension, which shall not exceed a further period of 6 months.

(3) The prospectus of a scheme shall also specify where the funds collected from investors will be kept and how they will be returned to investors, if necessary.

12. Establishment costs

(1) The costs of the establishment or initial organisation of a collective investment scheme and the application for authorisation may be borne by the scheme, the CIS manager or the promoter.

(2) For a self-managed scheme, or where proper arrangements have been made, the costs of the establishment of the scheme may be borne by the scheme as pre-operational expenses.

13. Withdrawal of authorisation

(1) Without prejudice to any other enactment, the Commission may, after allowing for representations to be made by a collective investment scheme, withdraw the authorisation of the collective investment scheme where the Commission has reason to believe that –

 (a) any of the requirements for the granting of authorisation is no longer satisfied;

 (b) it is undesirable in the interests of the participants or potential participants that the scheme shall continue to be authorised; or

 (c) the applicant has, for the purpose of regulation 9(3), knowingly submitted information which is false and misleading.

(2) For the purpose of paragraph (1)(b), the Commission may take into account any matter relating to the scheme, the CIS manager or the custodian, an officer or controller of the CIS manager, or any person employed by or associated with the CIS manager in connection with the scheme.

14. Avoidance of exclusion clauses

Any provision in the constitutive documents of a collective investment scheme which has the effect of exempting the CIS manager, the CIS administrator or the custodian or any other person from liability for any failure to exercise due care and diligence in the discharge of their functions in respect of the collective investment scheme shall be null and void.

Sub-Part C – Authorisation – Global Schemes

15. Application of this Sub-part

The conditions and requirements under this sub-part shall apply to all applicants for authorisation under regulation 16 and global schemes, including –

(a) a person holding enough voting securities in the scheme to control management and operations and elect a majority of the board of directors, or governing body having an equivalent capacity, of the collective investment scheme;

(b) a person controlling a body corporate or unincorporated, as the case may be, referred to in paragraph (a); or

(c) an umbrella fund whose shares are split into a number of different class funds or sub-funds.

16. Authorisation

(1) An application to the Commission for the authorisation of a collective investment scheme under section 97 of the Act shall be made by the CIS manager or proposed CIS manager or by the promoter of the CIS, in accordance with this Sub-part and such FSC rules as may be applicable.

(2) Subject to regulation 17, the application for authorisation as a global scheme shall contain the information specified in the Third Schedule and shall include –

 (a) the following documents or information –

  (i) a prospectus in accordance with the Fourth Schedule or a copy of the prospectus or similar offering document filed in another jurisdiction;

  (ii) the constitutive documents of the scheme;

  (iii) measures taken to prevent money laundering and financing of terrorism;

  (iv) latest audited financial statements as applicable;

 (b) the personal questionnaire form set out in the FSC rules which shall be completed by every officer or proposed officer of the collective investment scheme;

 (c) the fees specified in FSC rules;

 (d) such other information or document as the Commission may require in order to process the application.

(3) Subject to the approval of the Commission, an application under paragraph (2) may exclude such information and documents already filed with the Commission, provided the information and documents are not different from those already submitted.

17. Conditions applicable to global schemes

(1) The Commission may grant an authorisation for a global scheme provided that –

 (a) information relating to the CIS manager and the custodian as prescribed in these regulations is submitted with the application for authorisation;

 (b) a CIS administrator with a place of business in Mauritius is appointed;

 (c) the accounting and reporting services are carried out by the CIS manager, or the CIS Administrator of the scheme, having a place of business in Mauritius;

 (d) the prospectus or other offering document contains the following statements in a prominent position –

"Investors in [name of the global scheme] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."

 "The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statement made or opinion expressed with regard to it."

 (e) a certified copy of the prospectus or other offering document filed in a jurisdiction where the collective investment scheme is regulated or exempted from regulation is filed with the Commission;

 (f) information is provided on the CIS manager and the custodian, including their names and registered addresses and where regulated, if applicable;

 (g) information is given on whether the collective investment scheme is regulated, or shall be subject to regulation, in any jurisdiction and if so, a copy of the authorisation or similar consent of the regulator and if not, indication on what basis it is exempted from securities regulation in other jurisdictions;

 (h) adequate measures are taken to prevent money laundering and financing of terrorism and provided that the Commission is satisfied that these measures meet legislative requirements.

(2) An authorisation under section 97(5) of the Act may be granted subject to such terms and conditions the Commission may consider necessary or desirable for the protection of participants.

Sub-Part D – Approval of CIS Administrators

18. CIS administrator

(1) Subject to the prior approval of the Commission and on such terms and conditions as the Commission may determine, a CIS manager or a collective investment scheme, where appropriate, may appoint a CIS administrator to provide administrative services with respect to a collective investment scheme.

(2) When seeking the approval of the Commission under paragraph (1)(a), the CIS manager or the collective investment scheme shall –

 (a) specify which administrative services the CIS administrator may provide;

 (b) give complete details of the CIS administrator, including its constitution, resources, past experience in providing such services, names of the collective investment schemes to which administrative services have been or are presently provided;

 (c) provide any other information required by the Commission;

 (d) include the fees specified in FSC rules.

(3) The CIS manager or the collective investment scheme, where appropriate, shall seek the prior approval of the Commission for a change of CIS administrator.

Sub-Part E – Changes to Information Provided to Commission

19. Changes subject to prior approval of Commission

(1) No alteration to a collective investment scheme shall be valid unless –

 (a) the Commission has been informed; and

 (b) where required under the constitutive documents of the scheme, the shareholders of the scheme have approved the change.

(2) The prior approval of the Commission shall be required for –

 (a) the nomination of an officer of the scheme, the CIS manager or the custodian;

 (b) change in or addition to portfolio managers;

 (c) change in ownership or the acquisition of shares in the CIS manager;

 (d) the establishment of a subsidiary by the CIS manager.

(3) Unless the Commission requires such additional information as may be necessary to determine a request under paragraph (2)(a) or (b), it shall, within 10 business days from the date it receives the request, approve or object to the request.

(4) For the purpose of this regulation, a CIS manager or a custodian refers to a CIS manager or a custodian holding a licence issued by the Commission.

20. Changes in appointment of CIS manager or custodian

(1) The CIS manager or the collective investment scheme shall give written notice to the Commission of any proposal to replace the custodian of the collective investment scheme.

(2) The collective investment scheme shall give written notice to the Commission of any proposal to replace its CIS manager.

(3) No replacement under paragraph (1) or (2) shall be valid unless –

 (a) the shareholders of the scheme have approved the change in accordance with the constitutive documents; and

 (b) the Commission has given its approval to the proposed replacement.

PART IV – CUSTODIAN

21. Appointment of custodian

Every collective investment scheme shall appoint and have, at all times, a custodian.

22. Custody of assets

(1) The custodian of a collective investment scheme shall –

 (a) take the assets of the scheme into its custody for safe keeping pursuant to a written agreement with the collective investment scheme in accordance with regulation 24; and

 (b) hold and deal with the assets of the scheme in accordance with these regulations and the constitutive documents of the collective investment scheme.

(2) Except where it is appropriate to keep them outside the country to facilitate transactions outside Mauritius, assets of a collective investment scheme, other than a global scheme, shall be kept in Mauritius.

(3) Where the assets of a scheme are kept outside Mauritius under paragraph (2), the custodian shall appoint a sub custodian in accordance with these regulations.

(4) The delegation of custodial authority to a sub custodian shall not relieve the custodian from any of its obligations to the collective investment scheme, the CIS manager or the Commission.

(5) The custodian and the sub custodian shall act independently from the CIS manager and the collective investment scheme.

(6) The custodian shall not exercise any function or activity in relation to a collective investment scheme, other than that for which it has been licensed.

23. Sub custodian

(1) No sub custodian shall be appointed in relation to a collective investment scheme unless it is a bank, a trust company which is a subsidiary of a bank or a trustee of a trust and which shall have and maintain a minimum stated unimpaired capital of 10 million rupees or an equivalent amount.

(2) The appointment of a sub custodian shall be subject to the prior approval of the Commission.

(3) A sub custodian shall not exercise any function or activity in relation to a collective investment scheme, other than that specified under the agreement with the custodian.

(4) The custodian shall –

 (a) ensure that the appointed sub custodian satisfies the requirements of these regulations; and

 (b) not more than 60 days after the end of every financial year of the collective investment scheme, advise the collective investment scheme in writing of the names and addresses of every sub custodian and state whether every sub custodian satisfies the requirements of these regulations.

(5) The requirements of paragraphs (1) to (4) shall apply only where the appointment of a sub custodian is made by a custodian holding a licence issued by the Commission.

24. Custody agreements

(1) An agreement for custody and safe keeping of the assets of the scheme shall provide for –

 (a) the custodian accepting the custody of such assets;

 (b) the custodian agreeing to comply with the provisions of the constitutive documents or prospectus or offering document of the collective investment scheme and of the custodian agreement;

 (c) requirements with regards to the location of assets;

 (d) the method of holding assets;

 (e) the standard of care to be exercised by the custodian and its responsibility for loss;

 (f) that only the CIS manager or the self-managed scheme may give instructions to the custodian;

 (g) the custodian to forthwith submit a report to the Commission, and a copy thereof to the CIS manager and scheme, in relation to any failure of the CIS manager or scheme to meet the requirements applicable to the conduct of its business activities.

(2) No agreement between a CIS manager or a collective investment scheme with a custodian or between a custodian and a sub custodian shall provide for the creation of any encumbrance on the assets of the collective investment scheme except in relation to a claim for payment of the fees and expenses of the custodian or sub custodian for acting in that capacity.

25. Care of assets

(1) Subject to paragraph (2), the assets of a collective investment scheme not registered in its name shall be registered in the name of the custodian or a sub custodian of the collective investment scheme, or any of their respective nominees, with an account number or other designation in the records of the custodian or sub custodian so as to establish that the ownership of the assets is vested in the collective investment scheme.

(2) A custodian or sub custodian may arrange for the deposit of assets of the collective investment scheme with, and their delivery to, the CDS or a clearing and settlement facility or a foreign regulated depository or clearing agency provided that the records of either the participant in the book-based system or the custodian or sub custodian establish that the ownership of the assets is vested in the collective investment scheme.

26. Change of address

A custodian holding a licence issued by the Commission shall forthwith notify the Commission, in writing, of any intended change of address of its registered office or its permanent place of business in Mauritius.

27. Liability of custodian

(1) Without prejudice to its other obligations and liabilities, the custodian shall be liable to the collective investment scheme and participants of the scheme, as the case may be, for any loss suffered which may result from –

 (a) any unreasonable failure by it to perform its obligations; or

 (b) any improper performance by it of its obligations.

(2) Where a sub custodian has been appointed, the agreement with the sub custodian shall provide the collective investment scheme with means to enforce rights of participants against the assets of the collective investment scheme to be held by the sub custodian.

28. Notification of contraventions

A custodian holding a licence issued by the Commission shall forthwith notify the Commission in writing of any failure, act or omission of the CIS manager or the scheme, as may be applicable, constituting a breach or contravention of the Act, these regulations, FSC rules or of the constitutive documents of the collective investment scheme and of the steps taken by the custodian to recommend the CIS manager or the scheme to rectify the breach or contravention as soon as is reasonably practicable.

29. Financial statements

(1) A custodian holding a licence issued by the Commission shall file with the Commission quarterly financial statements as soon as possible, but not later than 45 days after the closing date of the relevant quarter, relating to the custodial activities.

(2) A custodian holding a licence issued by the Commission shall, as soon as possible but not later than 90 days of its balance sheet date, file with the Commission audited financial statements prepared in accordance with IFRS and audited in accordance with the International Standards on Auditing and such other standards as may be issued under the Financial Reporting Act.

(3) Paragraphs (1) and (2) shall not apply to a custodian who is also a reporting issuer under the Act.

PART V – CIS MANAGER

30. Appointment of CIS manager

(1) Subject to paragraph (2), a collective investment scheme, other than a global scheme, shall appoint and have, at all times, a CIS manager holding a licence issued by the Commission and having a place of business in Mauritius.

(2) The Commission may, on application, allow a company to be managed by its own board of directors, provided that the board of directors performs the functions of a CIS manager and that such directors are jointly bound and responsible to perform the functions of the CIS manager.

(3) In addition to complying with these regulations, the constitution of a self managed scheme shall specify that participants may convene a meeting and, by way of an ordinary resolution, remove any director considered no longer fit and proper to manage the assets of the self managed scheme.

(4) Where a collective investment scheme is constituted in any other legal form and wishes to be self managed, the Commission shall grant authorisation on being satisfied that the governing body of the collective investment scheme will be able to independently perform such functions as are incumbent on a CIS manager, and subject to such terms and conditions as it may determine.

31. Activities permitted to CIS managers

(1) Subject to paragraph (2), a CIS manager may carry out any of the activities related to the management of a collective investment scheme, including –

 (a) all administrative services required by the scheme;

 (b) provision of registrar and transfer facilities;

 (c) distribution of the securities of the scheme;

 (d) maintaining accounting records of the scheme;

 (e) giving investment advice in relation to the scheme; and

 (f) managing the portfolio of the scheme.

(2) The activities under paragraph 1(c), (e) and (f) are subject to the CIS manager and its officers meeting the relevant conditions and requirements under the Act, these regulations or any relevant rules.

32. Restrictions on activities of CIS managers

(1) Unless authorised by the Commission, the CIS manager holding a licence issued by the Commission shall not engage in any activity other than the management of collective investment schemes.

(2) A CIS manager holding a licence issued by the Commission shall give prior written notice to the Commission of any proposal to carry on the business of CIS management in connection with collective investment schemes or private pension schemes under the Private Pension Schemes Act that are established and authorised in a jurisdiction other than Mauritius.

(3) The notice required in paragraph (2) shall be accompanied by –

 (a) the prospectus of the non-Mauritian scheme;

 (b) details of any regulatory approval, given by or applied for, from the authorities in the countries in which the non-Mauritian scheme is, or is to be, established; and

 (c) such other information as the Commission may require.

[Reg. 32 amended by s. 57 of Act 15 of 2012 w.e.f. 1 November 2012.]

33. Change in officers

When appointing or replacing an officer or employee, the CIS manager shall ensure that such person is a fit and proper person and where the approval of the Commission is required with respect to any such officer or employee under the Act or these regulations, the CIS manager shall ensure that such approval is obtained before the appointment.

34. General duties of CIS manager

The CIS manager shall –

(a) ensure that the assets of a scheme are clearly identified and held separately from the assets of the CIS manager and the assets of any other scheme managed by the CIS manager;

(b) ensure that the assets are entrusted to a custodian for safe keeping;

(c) manage the assets of the collective investment scheme in accordance with –

 (i) these regulations;

 (ii) the constitutive documents;

 (iii) the latest published prospectus or offer document;

(d) take all reasonable steps and exercise all due diligence to avoid the assets of the collective investment scheme being invested in contravention of these regulations;

(e) ensure that the assets of the collective investment scheme are valued at regular intervals appropriate to the nature of the assets;

(f) except in the case of a self managed scheme, have prepared in the form required under the Act, or any regulations or rules made thereunder, the accounts required and shall arrange for such accounts to be audited in accordance with the Act;

(g) where applicable, ensure that the constitutive documents are made available for consultation free of charge in Mauritius, unless otherwise restricted by an enactment;

(h) maintain adequate resources in terms of personnel and infrastructure for the nature and development of its activities, at least as efficient as the resources described at the time of approval of a collective investment scheme;

(i) ensure that officers carrying on functions that require a licence or approval under the Act are properly licensed or approved;

(j) maintain such books and records as are set out in the Eighth Schedule;

(k) report to the Commission any breach of the Act and these regulations that –

 (i) relates to the scheme; and

 (ii) has had, has or is likely to have a materially adverse effect on the interest of participants,

as soon as practicable after it becomes aware of the breach;

(l) carry out or comply with any other duty, not inconsistent with this Act, that is conferred upon the CIS manager by the constitutive documents of the collective investment scheme; and

(m) ensure that it has relevant and reasonable written policy in place to cater for conflict of interest.

35. Change of address

A CIS manager holding a licence issued by the Commission shall forthwith notify the Commission in writing of any intended change in its registered office or permanent place of business in Mauritius.

36. Liability of CIS manager

Without prejudice to any other of its obligations, the CIS manager shall be liable to the collective investment scheme for any loss suffered as a result of any unjustifiable failure by it to perform its obligations or the improper performance by it of its obligations.

37. Termination of office

(1) The CIS manager of a collective investment scheme shall cease to hold office where it –

 (a) goes into liquidation, becomes bankrupt or has a receiver appointed over its assets;

 (b) ceases to be licensed to act as such by the Commission or the relevant authority in the jurisdiction it is established; or

 (c) retires in accordance with the constitutive documents.

(2) Where the office of the CIS manager is terminated under paragraph (1), the scheme shall notify forthwith the Commission of the steps taken to safeguard the interests of the shareholders of the scheme and the Commission may impose such conditions as it may determine.

PART VI – PRUDENTIAL AND CONDUCT OF BUSINESS RULES

38. Minimum capital

(1) A CIS manager holding a licence issued by the Commission shall maintain a minimum stated unimpaired capital of at least one million rupees or an equivalent amount.

(2) A CIS administrator shall at all times have a minimum stated unimpaired capital of 500,000 rupees or an equivalent amount.

39. Prohibitions

(1) A CIS manager shall not –

 (a) hold securities or funds of clients of a collective investment scheme, except in transit to the custodian charged with the custody of assets of the collective investment scheme;

 (b) subject to paragraph (2), loan funds to clients of a collective investment scheme or members of the CDS or members of any other clearing and settlement facility.

(2) A CIS manager may, with the prior approval of the Commission, loan securities to members of the CDS or members of any other clearing and settlement facility, provided a contract has been signed between the members of the CDS or members of the other clearing and settlement facility and the CIS manager.

(3) Subject to paragraph (4), the contract under paragraph (2), which may be general or specific, shall determine the conditions of the loan and the compensation to be paid to the CIS manager.

(4) The compensation received by the CIS manager under paragraph (3), from which reasonable charges may be deducted, shall be credited to the collective investment scheme where the securities came from.

(5) For the purpose of this regulation –

 "clients" means a participant or a person intending to invest in a collective investment scheme managed by the CIS manager.

40. General rules of conduct

(1) A CIS manager shall have in place such code of ethics and conduct which shall be binding on its officers, advisers, managers and employees and shall ensure that they are fit and proper for management of a scheme.

(2) A CIS manager shall be responsible for any act and omission of any of its officers, portfolio managers and employees.

41. Internal control

Every CIS manager shall establish documented rules of internal control to allow –

(a) the efficient supervision of the activities of the CIS manager;

(b) the effective supervision of all employees of the CIS manager; and

(c) to ensure compliance with the Act and any regulations and rules made thereunder.

42. Insurance

(1) Every CIS manager shall subscribe to an insurance policy to cover the following risks –

 (a) fraudulent activities of employees;

 (b) fraudulent instructions;

 (c) losses arising from the malicious or fraudulent corruption of electronic data or electronic transactions;

 (d) legal liability to third parties arising from breaches of professional duty.

(2) Evidence of the insurance subscribed under paragraph (1) shall be provided to the Commission within 10 business days from the date the CIS manager licence has been granted.

43. Publicity and sales literature

(1) No CIS manager shall issue to the public or participate in or knowingly allow its name to be used in respect of any advertisement, sales literature or correspondence, or shall issue or send any advertisement, sales literature or correspondence in connection with its business which –

 (a) contains any false statement or omission of a material fact or is otherwise false or misleading;

 (b) contains an unjustified promise of specific results;

 (c) uses unrepresentative statistics to suggest unwarranted or exaggerated conclusions, or fails to identify the material assumptions made in arriving at these conclusions;

 (d) contains any opinion or forecast of future events which is not clearly identified as such;

 (e) fails to fairly present the potential risks to the participant;

 (f) is detrimental to the interests of the public.

(2) A copy of any advertisement or sales literature proposed to be issued by a CIS manager holding a licence issued by the Commission shall be submitted to the Commission before it is issued.

44. Books and records

(1) A CIS manager shall keep its books and records and those of the collective investment scheme in accordance with the Eighth Schedule on a continual basis so that records are, at all times, up to date or able to be brought up to date within a reasonable time.

(2) A CIS manager shall keep accounting records in such a manner that they are sufficient to show and explain transactions and commitments, whether effected on its own behalf or on behalf of others, and in particular so that these records –

 (a) disclose with accuracy its financial position at any point in time within the previous 7 years;

 (b) demonstrate whether the CIS manager is or was at that time complying with its minimum stated unimpaired capital requirements; and

 (c) enable it to prepare and provide to the Commission, within a reasonable time, any financial report as at the close of business of any date.

(3) All records and documents required to be maintained by a CIS manager in writing or otherwise may be kept by means of mechanical, electronic or other devices provided –

 (a) such method of record keeping is not prohibited under any applicable legislation;

 (b) there are appropriate internal controls in place, to maintain the integrity of the information recorded;

 (c) such method provides a means to furnish promptly to the Commission, on request, legible and complete copies of those records of the CIS manager which are required to be preserved; and

 (d) the CIS manager has suitable backup and disaster recovery plans.

PART VII

SUB-PART A – AUDIT OF COLLECTIVE INVESTMENT SCHEMES

45. Appointment and qualifications of auditor

(1) The appointment of an auditor of a collective investment scheme shall be made in accordance with section 107 of the Act.

(2) The auditor of a collective investment scheme shall not be an officer of the custodian, the CIS manager or any support functionary of the collective investment scheme.

(3) An auditor shall cease to hold appointment as auditor of a collective investment scheme where –

 (a) the auditor no longer fulfils the requirements of this regulation; or

 (b) the Commission withdraws its approval.

(4) Where the CIS manager or the collective investment scheme revokes the appointment of the auditor, it shall forthwith notify the Commission of the revocation and the reasons thereof.

(5) Where there is no auditor appointed, the CIS manager or the collective investment scheme shall as soon as practicable appoint a new auditor.

46. Audit of accounts

The auditor shall audit the financial statements of the collective investment scheme in accordance with section 106 of the Act and these regulations.

47. Duty to report

(1) The auditor of the collective investment scheme shall forthwith report to the Commission any matter arising under section 107 of the Act and any matter he becomes aware of in his capacity as auditor which –

 (a) is likely to lead to a serious qualification or total disclaimer of opinion or refusal of the auditor's report on the accounts of the collective investment scheme; or

 (b) indicates material defects in the internal control systems or in the accounting records of the scheme.

(2) The Commission may call upon the auditor of a scheme to supply it with such information as it may specify.

(3) The auditor shall send to the board of the collective investment scheme and to the CIS manager a copy of any written report made by him to the Commission under paragraph (1).

48. Safe harbour provisions

No duty to which an auditor of a collective investment scheme may be subject shall be regarded as breached by reason of his communicating in good faith to the Commission any information under these regulations or by his complying with any obligation imposed on him by these regulations or the Commission.

Sub-Part B – Audit of CIS Managers

49. General requirements

Regulations 45 to 48 apply mutatis mutandis to the auditor of a CIS manager.

PART VIII – COLLECTIVE INVESTMENT SCHEME PROSPECTUS, FINANCIAL
STATEMENTS AND MANAGEMENT REPORTS

50. Documents to be filed and published by CIS managers

(1) In accordance with section 106 of the Act and the provisions of this Part, the CIS manager or a self-managed scheme shall file with the Commission the following documents relating to the scheme it manages –

 (a) the prospectus or offer document of the collective investment scheme;

 (b) the audited annual financial statements and the management report of the scheme prepared in accordance with the Sixth Schedule; and

 (c) the interim financial statements and the interim management report, prepared in accordance with the Seventh Schedule, for every quarter of a financial year.

(2) In accordance with section 106(2) of the Act, a CIS manager holding a licence shall file interim financial statements with the Commission for every quarter of a financial year.

(3) Subject to paragraph (4), the interim financial statements and annual report, including audited financial statements of a scheme, filed with the Commission, shall be made public.

(4) Paragraph (3) shall not apply to a global scheme unless the Commission determines otherwise.

(5) The requirement to file interim financial statements and interim management reports with the Commission shall not apply for the quarter where the closing date coincides with the balance sheet date.

(6) A corporation holding a Category 1 Global Business Licence shall be deemed to comply with section 106 of the Act and this regulation where the interim financial statements and audited annual financial statements are prepared in accordance with such internationally recognised accounting standards as may, from time to time be agreed with the Commission.

51. Prospectus or offer document of collective investment scheme

(1) For the purpose of this Part, the constitutive documents of a collective investment scheme shall, except as provided by paragraph (3), form an integral part of the prospectus or offer document of a collective investment scheme.

(2) The prospectus or offer document of a collective investment scheme shall include –

 (a) information specified in the Fourth Schedule and any other information provided for under these regulations; and

 (b) any further information that may be necessary to enable participants to make an informed judgment as to the investment proposed.

(3) Notwithstanding paragraph (1), the constitutive documents of a collective investment scheme may not be annexed to the prospectus or offer document of a collective investment scheme where –

 (a) participants and potential participants are informed of its contents in the prospectus or offer document of the collective investment scheme,

 (b) the constitutive documents will be sent to them free of charge on request; or

 (c) participants and potential participants are informed of the place in Mauritius where the documents are available for inspection.

(4) Where any significant change occurs or any new information arises which should be stated in the prospectus or offer document after it has been filed with the Commission, an addendum may be inserted into the prospectus or offer document of the collective investment scheme and it shall forthwith notify the Commission by filing a copy of the addendum therewith.

(5) An addendum filed with the Commission shall be valid unless the Commission rejects such a change or such new information.

(6) Subject to paragraph (5), the Commission may request the collective investment scheme to file a new prospectus if it so deems appropriate.

52. Approval of financial statements

The financial statements of a collective investment scheme shall be approved by the board of directors, or governing body having equivalent capacity, of the collective investment scheme.

53. Contents of annual and interim management reports

(1) The annual management report of a collective investment scheme shall be as specified in the Sixth Schedule.

(2) The interim management report of a collective investment scheme shall as specified in the Seventh Schedule.

54. Publication of documents

(1) The CIS manager shall submit to the Commission, on request, all information relevant to the reports and accounts of the collective investment scheme.

(2) Any prospectus, advertisement or other information promoting a collective investment scheme in Mauritius shall indicate where those documents or particulars may be accessible to the public.

(3) The CIS manager shall not cause a sale of shares in the collective investment scheme to any person unless it has offered to that person a copy of –

 (a) the prospectus or offer document of the collective investment scheme;

 (b) the most recent annual management report and the audited financial statements, where not included in the management report;

 (c) any subsequent interim management report.

(4) The CIS manager shall make copies of –

 (a) the collective investment prospectus or offer document;

 (b) the constitutive documents, where not annexed to the collective investment prospectus or offer document; and

 (c) the annual and interim management reports,

available for inspection by potential participants at the place specified in the prospectus or offer document.

(5) The CIS manager shall, at the request of any participant in the collective investment scheme, supply to that person free of charge a copy of the most recent collective investment prospectus or offer document, annual management report and any subsequent interim report.

PART IX – GENERAL REQUIREMENTS FOR COLLECTIVE INVESTMENT SCHEMES

55. Publication of prices

(1) Subject to paragraph (2), the collective investment scheme shall, in the manner and at the frequency described in the prospectus, publish the issue, sale, repurchase and redemption prices of the shares of the collective investment scheme.

(2) Any publication under paragraph (1) shall be done at least once every week or at such frequency as the Commission may approve.

56. Shares

The interests of participants in a collective investment scheme shall consist of shares or fraction of shares and each share or fraction of share shall be treated as representing the interest of the participant in the capital assets of the collective investment scheme.

57. Payments out of and into assets of collective investment scheme

(1) No expense shall be paid out of the assets of a collective investment scheme unless clearly disclosed in the prospectus or offer document of the collective investment scheme.

(2) The periodic fees of the CIS manager, paid out of the assets of a collective investment scheme by way of remuneration, shall be calculated, accrued and be paid in the manner determined by the constitutive documents of the collective investment scheme.

(3) The fees of the custodian paid out of the assets of a collective investment scheme shall be calculated, accrued and be paid in the manner determined by the constitutive documents of the collective investment scheme.

(4) All payments or repayments of an income nature payable out of or into the assets of a collective investment scheme shall be paid out of or into the income assets of the collective investment scheme.

(5) Every payment or repayment of a capital nature payable out of or into the assets of a collective investment scheme shall be payable out of or into the capital assets of the collective investment scheme.

(6) Every payment of an income nature payable out of the assets of a collective investment scheme shall, to the extent that the income assets of the collective investment scheme are insufficient to meet them when they fall due for payment, be paid out of the capital assets of the collective investment scheme.

58. Creation, issue, repurchases and redemptions of shares

(1) The constitutive documents of a collective investment scheme shall provide for the creation, cancellation, sale, repurchase and redemption of shares, valuation of the assets of the collective investment scheme and calculation of the sale, issue, repurchase and redemption prices of shares.

(2) Subject to these regulations, a participant in a collective investment scheme shall be –

 (a) entitled to have his shares repurchased or redeemed in accordance with the terms of the constitutive documents of the collective investment scheme at a price related to the net value of the assets to which the shares relate; and

 (b) determined in accordance with the terms published in the prospectus or offer document.

(3) A collective investment scheme shall comply with paragraph (2) where the constitutive documents of the collective investment scheme require the CIS manager to ensure that a participant is able to sell his shares on a licensed securities exchange at a price not significantly different from the price specified in paragraph (2).

(4) The CIS manager may suspend the repurchase or redemption of shares at any time for a period not exceeding 30 days, if it is of the opinion that there is good and sufficient reason to so suspend the repurchase or redemption of shares having regard to the interests of the participants.

(5) A collective investment scheme shall not accept a purchase order for shares of the collective investment scheme throughout the duration of the suspension.

(6) The CIS manager shall –

 (a) forthwith give written notice to the Commission of any suspension under paragraph (4); and

 (b) publish the notice of the suspension in 2 daily local newspapers where shares are offered in Mauritius or otherwise inform participants by way of reasonable means.

(7) Where the Commission is satisfied that the suspension is necessary in the interest of the participants or of the public, it may by notice in writing to the CIS manager require it to suspend the repurchase or redemption of shares for a period specified in the notice.

59. Valuation and pricing

(1) Except in the case of the first public offering, purchase and redemption prices of shares of a collective investment scheme shall be established on the basis of the net asset value calculated as specified in the prospectus or offer document of the scheme.

(2) The net asset value of a collective investment scheme shall, be calculated at least once every business day and where such calculation is not possible for the reasons stated in the prospectus of the scheme, it shall be calculated at least once every week or at such frequency as the Commission may approve.

(3) The collective investment scheme shall describe in its prospectus, the valuation method that it will employ in valuing its portfolio securities to arrive at a net asset value.

(4) The collective investment scheme shall describe in its prospectus the valuation method used for illiquid assets.

60. Advertising

(1) No collective investment scheme offering shares in Mauritius shall issue, use or cause to be issued or used for any purpose any advertisement for or in connection with the collective investment scheme, unless a copy of the advertisement is forwarded to the Commission not later than 5 working days before the date of first issue or use.

(2) Where, on receipt of a copy of the advertisement under paragraph (1), the Commission is not satisfied with the advertisement, it shall, before the date of first issue or use, require the collective investment scheme to amend, withdraw or refrain from issuing or using an advertisement as in its discretion it may determine.

(3) For the purpose of paragraphs (1) and (2) –

 "advertisement" does not include any publication of the issue, sale, repurchase or redemption prices of shares.

(4) An advertisement of a collective investment scheme shall include a warning statement that –

 (a) the price of shares, and the income from them (if the collective investment scheme pays a dividend), may decrease or increase; and

 (b) in certain circumstances a participant's right to redeem his shares may be suspended.

(5) The warning statement shall be printed in type of at least the same size as the rest of the text in the advertisement or in smaller text where it is prominently outlined.

61. Inclusion of performance data

(1) Where performance data or estimated yield is quoted in the prospectus, the offer document of a collective investment scheme, in an advertisement or any other invitation to the public to invest, the Commission may require justification of the calculation.

(2) No forecast of the performance of a collective investment scheme shall be made in the prospectus, the offer document of a collective investment scheme, in an advertisement or any invitation to the public to invest.

(3) For the purpose of paragraph (2), a prospective yield shall not constitute a forecast of performance.

(4) The requirements under this regulation shall apply to a collective investment scheme offering shares in Mauritius.

62. Changes to collective investment scheme documentation

(1) Subject to paragraph (2) and except with the prior approval of the Commission and, if applicable, of the shareholders of the collective investment scheme, no alteration shall be made to the constitutive documents of a collective investment scheme.

(2) The constitutive documents may be altered by the CIS manager or the self managed scheme where, in its opinion, the proposed alteration –

 (a) is necessary to enable compliance with fiscal or other statutory or official requirements;

 (b) is necessary to correct a manifest error;

 (c) does not materially prejudice participants' interests;

 (d) does not to any material extent release the custodian, CIS manager or any other person from any liability to participants; or

 (e) does not increase the costs and charges payable from the collective investment scheme assets.

63. Transactions with connected persons

(1) No person shall enter into underwriting or sub underwriting contracts on behalf of a collective investment scheme.

(2) Cash received on behalf

This section of the article is only available for our subscribers. Please click here to subscribe to a subscription plan to view this part of the article.