The Financial Services Act
The main changes which have been brought about by The Finance (Miscellaneous Provisions) Act 2021 to the Financial Services Act are outlined and commented upon below.
Regulatory Sandbox Authorisation:
Existing licensees and other body corporate may apply to the Financial Services Commission (FSC) for a regulatory sandbox authorisation.
What is a sandbox licence?
The sandbox offers innovators the opportunity to run a trial run where some rules have been temporarily removed. Each trial will run for a set period of time with a limited number of customers in order to test the product. We expect the trial to have explicit learning objectives to test the viability of the model. At the end of the trial, all rules will apply as normal. The innovator will report what it has learnt. Afterwards the company will consider the results during future policy development.
The Economic Development Board (EDB) has been issuing regulatory sandbox licences to those who intend to conduct a business activity as a trial run for the product before the policy phase. The new issuing of the regulatory sandbox authorisation, which will be granted by the FSC/Bank of Mauritius (BOM) as from now on, will now allow a person to conduct live experiments with fintech, regtech or other innovation-driven financial services.
The ability to carry out experiments prior to obtain related licencing requirements, will encourage investors and start-ups to develop innovative projects which will, in the long run, benefit the whole finance sector. When either institution is satisfied with the outcome of the experiments, the regulatory sandbox holder may then apply for a proper licence to enable the project to be materialised.
The Establishment of fintech innovation hub and digital lab:
The FSC will be responsible for setting up a fintech innovation hub and a digital lab. FSC will thus streamline the requirements for entry into and operation within the hub.
Fintech is a portmanteau of the terms “finance” and “technology” and refers to any business that uses technology to enhance or automate financial services and processes. The term encapsulates a rapidly growing industry that serves the interests of both consumers and businesses in multiple ways. From mobile banking and insurance to cryptocurrency and investment apps, fintech has seemingly endless modes of applications. The industry is huge and will continue to expand for years to come. This is a step encouraging the development of Fintech in Mauritius. The requirements for one to be eligible to enter the hub will be outlined by the FSC.
The certificate of good Standing:
The certificate of good standing for a company can now be requested by a law practitioner or an accounting firm.