CAPITAL MARKETS

LMS serviced the Market Maker for Bourse Africa in Mauritius from 2010 to 2021. This included handling leading client portfolios and has since become one of the leading service providers for Capital Market clients and is well-known to the regulator in this sector. As at mid-March 2021, the Capital Markets sector has updated the 2010 securities authorisation regulations to a more all-encompassing legislation with respect to Foreign Investment Dealer Rules.

The Capital Markets represents an external source of finance for entities. The Capital Markets enable companies in need of finance for expansion or working capital requirements to raise funds by issuing shares and selling them to the public.

The parties that are included in the Capital Markets are; Market intermediaries (Investment Dealers and Investment Advisers), Collective Investment Schemes and Close-end funds and CIS functionaries.

We, as the management company, can apply for the following licences for market intermediaries Investment Dealers and Investment Advisers)

INVESTMENT DEALER (FULL SERVICE)

The main legal framework within which an Investment Dealer Licence can operate is defined by The Securities Act 2005 and the Securities Licensing Rules 2007. In order to apply for an Investment Dealer Licence, the applicant should also be licensed as a GBC.

At LMS, we focus on the following two types of Investment Dealer Licences application for our clients, in which we have extensive experience:

1. Including Underwriting (Licence code: SEC-2.1A)

The holder of an Investment Dealer (Full Service including underwriting) Licence is authorised to:

• Act as intermediary in the execution of securities transactions for clients
• Trade in securities as principal with the intention of reselling these securities to the public
• Underwrite or distribute securities on behalf of an issuer or a holder of securities
• Give investment advise
• Manage portfolio of client

The applicant must at all times maintain a minimum unimpaired stated capital of MUR 10 million or an equivalent amount in any other currency and shall have a Professional Indemnity cover that varies with the volume of activities and risk of its business.

Processing fees – USD 3,000

Fixed Annual fees – USD 9,500

2. Excluding Underwriting (Licence code: SEC- 2.1B)

The only difference between a holder of an Investment Dealer (Full Service including underwriting) Licence and a holder of an Investment Dealer (Full Service excluding underwriting) Licence with regards to their authorised activities is that a holder of Investment Dealer (Full Service excluding underwriting) Licence not allowed to underwrite or distribute securities on behalf of an issuer or a holder of securities.

The applicant must at all times maintain a minimum unimpaired stated capital of MUR 1 million or an equivalent amount in any other currency and shall have a Professional Indemnity cover that varies with the volume of activities and risk of its business.

Processing fees – USD 750

Fixed Annual fees – USD 2,500

INVESTMENT ADVISER

The Securities Act 2005 also allows for Investment Adviser companies to be set up and licensed in Mauritius. The Investment Adviser Licence has numerous benefits particularly for investors managing Offshore Funds and Fund sponsors with offshore funds set up worldwide.

We focus on the following two type of Investment Adviser Licences for our clients:

1. Unrestricted (Licence code: SEC – 2.4)

The holder of an Investment Adviser (Unrestricted) is authorised to:

• Advise, guide or recommend other persons, or hold himself out to advise, guide or recommend other persons, whether personally or through printed materials or by other means, to enter into securities transactions.
• Manage portfolio and securities

The applicant must at all times maintain a minimum unimpaired stated capital of MUR 600,000 or an equivalent amount in any other currency

Processing fees – USD 500

Fixed Annual fees – USD 1,900

2. Restricted (Licence code: SEC -2.5)

The only difference between the holder of an Investment Advisor (Unrestricted) Licence and a holder is of Investment Advisor (Restricted) Licence with regards to their authorised activities is that the holder of Investment Advisor (Restricted) Licence is not allowed to manage portfolio and securities.

The applicant must at all times maintain a minimum unimpaired stated capital of MUR 500,000 or an equivalent amount in any other currency

Processing fees – USD 500

Fixed Annual fees – USD 1,200

OTHER KEY REQUIREMENTS FOR INVESTMENT DEALERS AND INVESTMENT ADVISORS

1. Applicant is required to meet the relevant economic substance requirements

2. For investment dealer licence, the applicant should ensure that at least two members are appointed on the investment dealer team to ensure business continuity. The strength of the investment dealer team is a key component of the application and they should prove their experience in dealing.

3. For investment adviser licence, the applicant should ensure that at least two members are appointed on the investment advisory team to ensure business continuity. The strength of the investment advisory team is a key component of the application and they should prove their experience in investment advisory services

4. Details on the proposed anti-money laundering and counter-terrorist financing (AML/CFT) framework, including appointment of the Money Laundering Reporting Officer (MLRO), Deputy Money Laundering Reporting Officer (DMLRO) and Compliance Officer must be submitted upon application, which LMS can readily assist with.