Since the blacklisting of Mauritius by the European Union, the FSC has strengthened its regulatory and enforcement powers, and in so doing, many revocations, disqualifications and administrative penalties have been imposed on several licensees during the year 2020.
Under Section 43(1) (a) of the Financial Services Act (FSA), the FSC is mandated to conduct on-site inspections to see if licensees are compliant. In cases where there are breaches, the FSC issues a deficiency letter detailing the on-site inspection findings and requiring the licensee to submit an action plan to remedy to the breaches. Notwithstanding the remedial plan submitted by the Licensee, the matter may still be referred to the Enforcement Committee.
The Enforcement Committee was established under Section 52 of the FSA with the aim of being an internal independent committee of the FSC. When a deficiency letter is sent to a Licensee or whenever the Chief Executive is not satisfied with the remedial plan provided, the Chief Executive provides a written notice to the Licensee and mentions of its intention to refer the matter to the Enforcement Committee pursuant to section 53(1) of the FSA. Under this Section, the Chief Executive is mandated to report to the Enforcement Committee cases where a licensee has contravened any relevant act or condition of its license; has committed a financial crime; no longer carries out the business activity for which it is licensed or has failed to commence business within 6 months from the date on which it is licensed, among others.
Pursuant to Section 7(1)(c) of the FSA, the Enforcement Committee is empowered to impose administrative sanctions against a licensee but should ensure that a notice is issued to the latter. The notice shall clearly state the intention of the Enforcement Committee to impose the administrative sanction, the type and terms of the administrative sanction and the right of the licensee to make a written representation to the Enforcement Committee within a period of time not exceeding 21 days from the date of the notice. Whenever the Enforcement Committee decides to impose an administrative sanction, there are five factors that the Committee takes into consideration to determine the level of administrative penalty to be imposed: disgorgement, seriousness of the breach, mitigating and aggravating factors, adjustment for deterrence and adjustment effected if the amount of the administrative penalty would cause financial hardship.
It is noteworthy to mention that upon receiving the notice of the decision of the Enforcement Committee, any aggrieved licensee may, within 21 days, forward an application to the Financial Services Review Panel specifying the reasons for a review of the decision.
In the same line, a Settlement Framework has also been put in place by the FSC. The Settlement Framework is an alternative to the Enforcement Committee and as the spirit of the Alternative Dispute Resolution suggests, it saves considerable time as the licensee already admit the breach. However, the final decision of the request for the Settlement Framework rests on the FSC. In cases where the request is not entertained, licensees must go through the Enforcement Committee.
How can Temple Consulting help you?
Temple Consulting Ltd specializes in the provision of compliance consultancy services to firms which are licensed by the Financial Services Commission and the Bank of Mauritius and has expert consultants who provide compliance advices on the prevention of financial crime, the adoption of anti-money laundering processes, and measures to combat terrorism financing.
Temple Consulting Ltd also provide assistance at any stage of the business cycle, including assistance during FSC inspections, remedial plan submission and support and assistance whenever a licensee is referred to the Enforcement Committee.
Through our sister company, Chambers of Urmila Boolell SC (CUB), we are also able to provide integrated solutions and legal assistance for matters related to the Enforcement Committee and the Settlement Framework.
