While you are looking for a trusted, reputable Forex broker, one regulatory agency you may sometimes see listed is the Financial Services Commission (FSC) of Mauritius, also known as Commission des Services Financiers de Maurice in French.
To confirm for yourself whether a Forex broker is in fact registered with the FSC, you can look up their name in the Register of Licensees. Doing so will show you whether or not the license exists, what date it was issued, what type of license it is, and any additional notes.
You should also conduct a general search of the FSC's website for the name of the broker. Some brokers unfortunately lie and claim to be regulated by the FSC when they are not. When the FSC finds out about this, they publish memos to their website calling out the frauds.
Responsibilities
The FSC of Mauritius is responsible for regulating all financial services in Mauritius except for banking institutions.
The FSC in turn is supervised by another government agency called the Ministry of Finance and Economic Development.
The Financial Services Commission is in charge of issuing licenses and ensuring that licensees are conforming to all relevant regulations. The following laws are part of the legal framework in which the FSC operates:
- The FSC Act
- The Captive Insurance Act
- The Private Pension Schemes Act
- The Virtual Asset and Initial Token Offering Services Act
- The Securities Act
- The Insurance Act
If a financial service provider violates the FSC's regulations, the FSC is empowered to take action against it.
Describing its mission and work, the FSC writes:
The FSC regularly reinforces its supervisory framework in response to international development and challenges in order to promote robust regulation of its licensees, safeguard public interest, foster investors' confidence, protect consumers and ensure more effective enforcement.
The FSC also writes that it is here to:
- promote the development, fairness, efficiency and transparency of financial institutions and capital markets in Mauritius;
- suppress crime and malpractices so as to provide protection to members of the public investing in non-banking financial products; and
- ensure the soundness and stability of the financial system in Mauritius.
Who should register?
Here are some examples of types of financial service providers that should apply for a license with the FSC:
- Spot commodity brokers
- Spot commodity clearing houses
- Spot commodity markets
- Spot commodity trading advisors
- Investment dealers
- Investment advisors
- Foreign investment dealers
- Foreign investment brokers
- Global shared services
- Asset managers
- Financial product distributors
- Pension scheme administrators
- Global legal advisory services
- Crowdfunding companies
- Money lenders
- Robo-advisor services
- Credit rating agencies
- Actuarial services
- Insurance agents
- Insurance brokers
- Insurance salespeople
This is not a comprehensive list. To see the full list of all types of entities that should register with the FSC, visit the codified list.
When it comes to Forex market regulation, it falls into the jurisdiction of the FSC, and are subject to all relevant registration and compliance requirements.
Registration and compliance requirements
The specific registration and compliance requirements for a business licensed by the FSC depend on what type of business it is.
The FSC does not consider Forex to be a "security." This is confirmed in this memo, which states:
In addition, when assessing whether an applicant may offer/promote the services of such unregulated platforms, the FSC will verify whether the unregulated platforms ensure sufficient investor safeguard mechanisms. [Note: The definition of securities (S2 Securities Act) does not include forex trading].
Most Forex brokers that are regulated by the FSC are under the category SEC-2.1B: Investment Dealer.
Here are some of the basic licensing requirements for Investment Dealers with the FSC:
- Processing fee: $750 USD
- Annual fee: $2,500 USD
- The minimum capital requirement is 1,000,000 Mauritian rupees, or equivalent in another currency (approximately $21,535 USD)
- Applicants structured as companies need to provide a copy of the constitution, along with a legal certificate, and certified true copies of statutory documents lodged with the Corporate and Business Registration Department (CBRD)
- A detailed business plan must be submitted with the application
- If the broker has a trading platform, specific details on that platform must be included
- Details about all staff members, promoters, and beneficial owners must be included with the application
- The application must include information about any third parties involved in trade execution, as well as liquidity providers, and over the counter trading
You can view the full licensing criteria for this category to see the exact details that must go into the application.
Powers at the FSC's disposal
You know that the FSC of Mauritius can issue licenses to brokers and other financial services. But what else can this regulatory body do? How can it enforce the regulations that govern brokers operating in Mauritius?
The FSC takes a proactive approach in regulating financial services, seeking to prevent problems whenever possible, rather than having to play constant catch-up.
Here are the duties that the FSC lists:
- Protecting consumers;
- maintaining confidence in the financial system;
- financial stability; and
- reducing financial crime.
In order to achieve these ends, the FSC conducts frequent reviews and requires periodic reporting. It also physically inspects the premises of the companies that operate under its oversight, and sets robust licensing requirements to hold companies to high standards.
Two documents that can help you better understand the FSC's enforcement protocols are the Enforcement Manual and the Settlement Framework.
In the Enforcement Manual, you can read about:
- The FSC's powers of investigation, and process of investigation
- The administrative sanctions that the FSC can impose
- The framework for enforcement of global businesses
- How the review panel works
If the FSC deems that a violation has taken place, they can pursue disciplinary action against the company. For example, they can suspend their license, or revoke it altogether.
Many actions that the FSC has taken against brokers have taken the form of warnings issued to the public against companies falsely claiming to be regulated by the FSC. For an example, see this Warning against WorldBridge Securities (WorldBridge).
The FSC can also take other stronger measures to enforce its rules and standards. As an example, this Public Notice of Suspension was filed against a firm called Adamas Capital.
Reporting to FSC
If you believe that a Forex broker has broken any of the laws of Mauritius, you can report it. You also may report any behavior that you believe will harm the public.
You do not need to have tried to resolve the matter directly with the broker first. You can simply go straight to the FSC.
When you give your report, provide as much detailed information as you can about the firm, as well as any specific individuals involved. Try to report the issue promptly. Explain clearly what is going on, and how long it has been going on for.
You can find the whistleblowing form here. You may also email your tip to whistleblowingdesk@fscmauritius.org, or call 404-5694 (Ext 7077). If you do not feel safe sharing your identity, you may report anonymously.
Conclusion
If you see that a Forex broker has a license with the FSC of Mauritius, you now have the resources you need to understand their licensing requirements and FSC's enforcement powers in detail. Remember to double-check that the license is real by looking up the company in the FSC's Register of Licensees before opening an account.
