The Financial Services Development Act (FSD) Act consolidates our existing regulatory and supervision framework while simultaneously putting in place a unified regulatory framework for the financial services sector. This new legislation also reflects changes made in line with initiatives of international bodies such as the OECD, FATF, UN Offshore Forum and the core principles of international supervisors (WS, IOSCO, OGIS).
The advantages of the single regulatory system for a small island economy as Mauritius are many. First, it fills the supervisory gaps across the range of financial activities on offer in Mauritius. Prior to the enactment of the Financial Services Development Act, regulatory oversight extended only over the banking, insurance, securities and offshore services, leaving certain sectors such as fund management, pensions funds, leasing companies as well as financial intermediaries completely unregulated or only partially regulated. These are high-risk sectors not only for depositors and investors but also for the whole stability of the financial system.
Secondly, integrated regulation and supervision make for a more effective use of the limited human resources available in the field of supervision and by combining the various regulators, we reap the economies of scale associated with one large organisation. Thirdly, a combined regulatory framework allows for a more optimal use of the technical resources at our disposal, notably in these highly specialised sectors of activities and IT. Fourthly, an integrated regulatory framework allows for a more focused strategy in terms of promotion of the Mauritian Financial market and in creating a more coordinated approach in terms of skills development and training. Lastly, and more importantly, a single regulatory framework establishes a coherent financial structure that caters to both domestic and international business.
The other provisions of the FSD Act deal with the administration of the relevant Financial Services Acts, namely the Stock Exchange Act, the Insurance Act, the Protected Cell Companies Act and the new Trusts Act.
Two other important provisions exist in the legislation in respect of complaints by consumers of financial services and the investigation of these complaints by the Financial Services Commission (FSC). Consumer complaints now receive due attention by law and redress will be made by the FSC.
