MAURITIUS Law and Practice Contributed by: Bhavna Ramsurun, Pinki Mahata, Lorna Senivassen and Shreya Mungur, BLC Robert & Associates
A retail fund formed as a CIS must appoint a custodian that holds a custodian licence under the Securities Act 2005 to hold and safekeep the assets of the fund. Only banks and trust com - panies that are subsidiaries of banks are eligi - ble for a custodian licence. If the fund holds a GBL, it may appoint a foreign custodian with the approval of the FSC. The appointed custodian must act independently from the fund manager and the fund. CEFs are exempt from the requirement to appoint a custodian, with the assets being held in the name of the fund itself. Risk The prospectus of the retail fund must disclose all material risks to potential investors. For retail CISs in particular, the prospectus must explain the nature of the risks, including minimum expo - sure to stock market, sensitivity to rate of inter - est risk, exposure to currency risk, concentration risk, derivative risk, foreign investment risk, and investment in illiquid securities risk. Valuation and Pricing An open-ended retail fund must conduct a valu - ation on a daily basis or at such other intervals as agreed with the FSC. The prospectus must describe the valuation method that such fund will employ in valuing its portfolio to arrive at a NAV. System and Controls Various prudential and conduct of business rules apply to an open-ended retail fund, such as: • minimum funding requirements; • regulation of its constitutive documents and prospectus; • regulation of its book-keeping principles;
• regulation of transactions with related parties; and • mandatory investors’ voting powers. Insider Dealing and Market Abuse The Securities Act 2005 makes a provision for market abuse, which creates the offences of insider dealing, false trading, market rigging, fraud, and deceptive conduct involving securi - ties. The prohibition on insider dealing is a gen - eral prohibition applicable to any person who uses insider information to deal in the securities of a reporting issuer (directly or indirectly) or who discloses insider information unlawfully. Transparency Retail funds have several disclosure and report - ing requirements, as detailed in 3.1.4 Disclosure Requirements . In addition, an open-ended retail fund must publish the issue, sale, repurchase and redemption prices at least once a week or at such frequency as the FSC may approve. Money Laundering There is no difference in the obligations of AIFs and retail funds under the AML laws, as detailed in 2.4 Operational Requirements . Short Selling There are no rules that specifically address short selling. For retail funds, securities lent and col - lateral received by the fund must be disclosed
in the financial statements. FATCA and CRS Regimes
Funds in Mauritius must assess their FATCA and CRS classification to determine their reporting requirements to the Mauritius Revenue Author - ity. Please see 2.4 Operational Requirements for further details.
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