Assets management

1. Harbour’s shop

Chapter 01 taught you to ask what the paper is. This chapter is the first activity those questions were for.

Harbour Asset Co sits in Port Louis and manages other people’s investment portfolios. It has twelve clients. One of them is Reef Holdings Ltd, a Global Business Licence company with a listed-share book of about USD 8 million. Reef signs a discretionary mandate. In substance the mandate says: invest this money within these limits, send a report each quarter, do not step outside the agreed risk. Harbour’s CIO chooses the securities and sizes the positions. The shares sit with a bank custodian in Reef’s name. When Harbour wants to buy or sell, it sends an order to a licensed dealer. Harbour is paid a management fee. It does not own Reef’s money.

That shop is FS-1.1 Assets Management. The Financial Services Act lists “Assets management” in Second Schedule Part I. Section 14 then forbids anyone to carry it on in Mauritius without a licence:

Section 14(1): “No person shall carry out, or hold himself out as carrying out, in Mauritius any financial services without a licence issued by the Commission.”

The Schedule names the shop. Section 18 lets the Commission license the business activity specified on the letter. The letter is the book. The three facts that have to stay true of that book are already in Reef’s file:

1. Harbour does not own the money. A mandate is not a transfer of beneficial ownership. If the securities sit in Harbour’s house account, you are no longer describing this shop.
2. Harbour is not the fund. Reef has its own account. Twelve clients means twelve accounts. Two hundred investors in one pool with one NAV is a collective investment scheme.
3. Harbour is not the broker. Picking the stock is the manager’s job. Filling the ticket on an exchange is the dealer’s job.

Financial Services Act, section 14(1) and Second Schedule Part I. See the register note · Open the published text ↗.

2. A week with Reef

Monday. Reef’s beneficial owners are already on the file. The securities move to the bank custodian in Reef’s name. The mandate names Harbour’s CIO as the person who may instruct the dealer.

Tuesday. A bank share has run ahead of Reef’s agreed sector limit. The CIO sends a sell order. The dealer executes. The custodian confirms. Harbour’s operations person matches the three tickets — instruction, execution, custody. Nothing in that chain required Harbour to be a member of the Stock Exchange of Mauritius.

Wednesday. Compliance logs a new Reef beneficial owner and the CIO’s own personal-account dealing. The mandate says Harbour must not front-run Reef.

Thursday. A thirteenth company asks to be “just added to Reef’s account to save fees.” Harbour says no. Mixing two clients into one account starts to look like a pool. Each client keeps a separate account.

Friday. The quarterly report goes out: holdings, performance against the agreed benchmark, fees, and a one-page note on a risk-limit breach that was closed the same day. That report is part of the shop. It is not a prospectus.

The other eleven clients look like Reef: a named person, a signed mandate, a separate custody account, orders through a dealer. That is what FS-1.1 is used for. The Act matters when Harbour applies, when the Commission writes conditions onto the letter, and when the same promoter telephones with a different idea.

3. What the same promoter asks next

The facts are fictional. The method is the course: keep the shop you have just watched, and ask which desk is now doing the work.

A public unit trust

The promoter wants 200 members of the public in one Mauritius unit trust, with a published NAV and a prospectus. The slide says Harbour already has FS-1.1, so the fund is covered.

Pooling the public into one scheme is a collective investment scheme. The file needs a CIS manager licence (SEC-4.2) and a CIS authorisation. FS-1.1 does not become a fund licence because the CIO is the same person. If Harbour later wants to manage the scheme, that is a second permission.

A related trap sits inside the shop you already know. Harbour may hold units of someone else’s CIS inside Reef’s portfolio. That is a portfolio holding. It is not Harbour operating the CIS.

A SEM trading terminal

The CIO wants a SEM membership “to save brokerage” and to execute the twelve mandates as a member.

Executing as a broker is a dealing business under the Securities Act. Keep sending orders to a dealer, or apply for a dealer licence. The student question is not whether a clever reading of “assets management” can include dealing. It is which desk is doing the work. If the work is filling tickets as a business, you are on the dealer corridor.

One family, the house, the tax calendar and the shares

The Ramdin siblings want one Mauritius company to employ staff who run the family companies, the house, the tax calendar and the listed-share portfolio — and no third-party clients.

That is the family-office conversation (FS-1.15 for one family, FS-1.16 for more than one), under the 2026 Family Office Rules. A family office is a private office. Harbour is a mandate shop that already serves twelve unrelated clients. FS-1.1 is not a family-office holiday — tax belongs in Mauritius Tax — and a family office is not a substitute for this licence if the staff are in fact managing other people’s money.

The promoter asks Harbour to…	This licence?	Why
Keep managing Reef and the other eleven under signed mandates, separate accounts	Yes	That is the shop
Pool 200 investors into one unit trust with a NAV	No	CIS manager + CIS authorisation
Fill the tickets as a SEM broker	No	Dealer licence
Safekeep share certificates as a business	No	Custodian (FS-1.7, or SEC-4.1 for a CIS)
Serve one family’s house, tax and investments as a private office	Look at FS-1.15	Different statutory book
Give one-off research with no discretion to deal	Look at SEC-2.4 / 2.5	Advice, not management

4. Papers that sit beside this one

“Someone in Mauritius picks stocks” is several doors. Three of them were the telephone calls above. Four more sit on the same facts without being a new story.

Reef already holds a Global Business Licence (FS-4.1). That is an overlay on Reef, not Harbour’s activity. Harbour may later hold a GBL of its own. The GBL does not authorise assets management, and FS-1.1 does not make Harbour a GBL holder. USD fee figures on the FS-1.1 row attach to that overlay unless the directory states a different conversion rule.

An unrestricted investment adviser (SEC-2.4) is a Securities Act neighbour. In practice that person may also run a discretionary portfolio. Do not assume FS-1.1 is the only way into discretionary management, and do not assume Harbour’s letter is an adviser licence. The two codes sit on different Acts. A client who wants research plus dealing instructions they will place themselves is often on the adviser corridor. Reef, who wants “you decide, you instruct the dealer, you report,” is this shop.

Distribution of financial products (FS-1.2) is placing someone else’s product. If Harbour sells a third-party fund to Reef without managing Reef’s portfolio, that is a distributor’s conversation.

Custody (FS-1.7) is safekeeping as a business. The bank that already holds Reef’s shares is doing that work. Harbour instructing the bank does not make Harbour the custodian.

Financial Services Act, section 14 and section 18(1); Securities Act, sections 29, 30 and 98. Neighbouring codes have their own chapters. Do not import their books into this letter.

5. The letter and the file

Once the shop is in view, the Act is the file — not a second lesson.

Section 16 is the application: a business plan, customer-due-diligence particulars of promoters, beneficial owners, controllers and proposed directors, the fee, and whatever else the FSC Rules or the Commission ask for. Section 18 is the grant:

Section 18(1): the Commission may issue a licence “authorising the applicant to carry out the business activity specified in the licence on such terms and conditions as may be specified in FSC Rules or as it deems appropriate in the circumstances.”

It must not grant unless, among other things, the applicant has adequate resources, infrastructure and staff, fit-and-proper controllers, and the grant would not prejudice the industry. The holder must continue to satisfy those tests.

For Harbour that translation is concrete. The twelve names, starting with Reef, are the business plan. The CIO who sent Tuesday’s order is the person who takes the investment decisions, and is not also the compliance officer on a one-person slide. Reef’s securities sit at a named bank, not in Harbour’s house account. A new Reef beneficial owner is a file event. Personal-account dealing and a client who is also a Harbour shareholder are conflicts to write down. “High-net-worth individuals, worldwide” is a slogan; it is not this file.

The published FS-1.1 criteria on the 1 July 2026 directory are a checklist. They neither replace those sections nor restrict the Commission’s power to write further terms onto the letter. Processing fee Rs 22,500 (USD 1,000) and annual fee Rs 52,000 (USD 1,900) are directory figures as at 1 July 2026. Circular Letter CL20260107 records the operational fee year; it does not rewrite the activity.

Financial Services Act, sections 16 and 18; FSC codified list as at 1 July 2026; Circular Letter CL20260107. Teaching extracts, not a certified print. Cut-off 20 September 2026.

6. How to cite FS-1.1

Use this when a note, a memo or a later chapter needs the coordinates. The shop is the lesson above.

Coordinate	As at 20 September 2026
Directory code	FS-1.1 Assets Management
Legal nature	Licence
Enabling law	Financial Services Act 2007, section 14 · Second Schedule Part I
Fees as at 1 July 2026	Processing Rs 22,500 (USD 1,000). Annual Rs 52,000 (USD 1,900). USD figures follow the GBL overlay unless the directory states a different conversion rule.
Status at cut-off	Published directory category as at 1 July 2026. Operational conditions remain those on the licence letter.

The structured library card keeps the same coordinates, with the statutory extracts in one place: open FS-1.1 in the reference library.