In the wake of constant threats of imminent financial scams and scandals, the FSC reinforces its supervisory framework to promote strong regulation of its licensees in the interest of the public and to foster investors’ confidence by ensuring more effective enforcement. One such enforcement measure includes conducting onsite and offsite inspections. The FSC is empowered under the Financial Services Act and under Section 43(1) (a), the FSC can conduct onsite inspections and request information and documentations from licensees.
The main aims behind these inspections are to ensure that licensed entities are financially sound and are compliant with its legislative framework and. Additionally, the inspection also serves to identify licensees who are engaged in unlawful activities and include reviewing the conduct of licensees for fairness and transparency and whether the licensees are adhering to the AML/ CFT legislation.
The FSC is also empowered under the Financial Services Act (FSA) to issue a private warning and to disqualify a licensee from holding a license or disqualify the officer of the licensee if the requirements set in the law are not met.
The FSC carries out pre-surveillance at the stage of licensing to ensure only qualified licensees operate with the Mauritius IFC (Mauritius International Financial Centre). Applicants must demonstrate financial soundness, governance and potential for good market conduct before being licensed. Once licensed, licensees come under the continuous surveillance and monitoring by the FSC and are expected to always comply with the prevailing legal framework and to meet all the licensing conditions and licensing requirements. Constant monitoring and surveillance entails ensuring that licensees always comply with legislations which is verified through off-site supervision and on-site inspections.
On-site Supervision
The inspection conducted by the FSC is based on “The Prevention Model” which consists of frequent review processes and reporting requirements. An onsite inspection is one among the supervisory tools used by the Commission to understand the business models and culture of licensed firms. On-site inspections usually take place where greater emphasis is put on supervision and severe licensing framework is adopted. As a risk-based regulator, throughout its work, the FSC prioritises its resources in the areas that pose the biggest threats to its regulatory objectives..
Off-Site Supervision
Another part of the FSC Inspection includes “off-site supervision”. Off-site supervision consists of reviewing and analysing audited financial statements, statutory documents and any other reports submitted by licensees. The review allows the FSC to determine the compliance status of licensees with relevant laws, financial soundness and solvency position of licensees, and ongoing assessment of licensees.
Further Investigation
An investigation may follow from an inspection. The Commission is not required to start an investigation even if there is sufficient information to start enforcement action. If the FSC conducts investigation, then the person under inquiry is expected to assist in the investigation process and to provide the required and requested information in a timely manner and comply with the deadlines set. A person who intentionally gives false or misleading information and fails to answer questions may be found guilty of an offence. In some circumstances he/she may be liable to a fine not exceeding 500,000 rupees and imprisonment for a term not exceeding 5 years. Falsifying or destroying evidence by a person which may be important during an inspection is an offence. The person under investigation is expected to provide precise answers and support answers with the relevant supporting documents.
How can Temple Consulting help you?
Temple Consulting specialises in the provision of compliance support services to firms licensed by the FSC and provide assistance to firms during and after FSC visits. With a team of professionals with niche expertise in legal and compliance matters, we are experienced in AML-CFT compliance audits, reviewing an organization’s policies and procedures, drafting relevant manuals as well as ensuring that same are in line with the latest regulatory requirements.
Additionally, our sister company, Temple Professionals Ltd, provide tailor-made in-house training as well as public courses on various compliance related matters.
For more information, kindly get in touch with us on (+230) 210 3588 or [email protected]
