FS-1.19 Crowdfunding.

Financial Services Act section 2: “financial services” means any financial services or financial business activities governed by the relevant Acts, and includes the financial business activities specified in Part I of the Second Schedule.

Second Schedule Part I lists “Crowdfunding” as a financial business activity. The Schedule names the activity; it does not add a further statutory definition of the book of business. What is permitted is the business activity specified on the licence under section 18(1), read with any FSC Rules and the published criteria for this code.

Financial Services (Crowdfunding) Rules 2021, rule 2: “crowdfunding” means solicitation of funds from investors for a specific investment purpose through an online portal or electronic platform. An “investment” means unlisted shares, debentures or other equity-like instruments or revenue sharing in a business. A “retail investor” is any person who is not an expert investor.

Rule 4(1): “No person shall operate a crowdfunding platform in Mauritius without a crowdfunding licence issued by the Commission.” Rule 4(3): the operator shall be a legal person incorporated in Mauritius. Rule 14: a reporting issuer shall not seek funding on the platform.

The operator’s licence is not a CIS, not an investment-dealer licence, not P2P lending and not an ITO issuer registration. Issuers and investors remain other persons with their own duties.

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.” Section 14(2): contravention is an offence, a fine not exceeding one million rupees and imprisonment for a term not exceeding 8 years.

Section 16(1): an application must be in such form and manner as FSC Rules specify and accompanied by “(a) a business plan or feasibility study outlining the proposed business activity of the applicant; (b) particulars and information relating to customer due diligence verification of promoters, beneficial owners, controllers and proposed directors …; (c) such fees as may be specified in FSC Rules; and (d) such other information as may be specified in FSC Rules or otherwise required by the Commission”.

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.” Section 18(2) forbids a grant unless, among other things, the application complies with the law, the applicant has “adequate resources, infrastructure, staff with the appropriate competence, experience and proficiency”, adequate arrangements to supervise everything done under the licence, fit-and-proper controllers and beneficial owners, and “no prejudice would be caused or would ensue to the financial services industry”. Section 18(3): the holder “shall, at all times, continue to satisfy the requirements specified in subsection (2)”.

Section 25: the Commission may, by written notice, vary a licence. It must not restrict the authorised activity or include further conditions unless it has notified the licensee of the proposal and the reasons and given a reasonable opportunity to make representations.

Part V ongoing obligations of licensees still attach: record keeping (section 29) and audited financial statements (section 30), unless a specific exemption is granted. A circular or a criteria PDF does not rewrite those sections.

Rule 5: registered office and principal place of business in Mauritius. Rule 6: minimum unimpaired stated capital of MUR 2 million or its equivalent, or such higher amount as the Commission may determine, at all times. Rule 7: board of at least three directors, of which at least 30 per cent independent and one resident in Mauritius.

Rule 18: over a 12-month period a retail investor must not invest more than MUR 350,000 on the platform; no investment limit applies to expert investors. Rule 19: an issuer shall offer to raise an amount not exceeding MUR 15 million on a crowdfunding platform over a three-year period, or such other period as the Commission may approve.

Rule 20: funds received as intermediary must sit in identified, non-interest-bearing accounts with a Bank of Mauritius-licensed commercial bank, separate from the operator’s own funds. Rule 29: officers, employees and their associates must not finance an issuer, receive funding from an investor, or hold an interest in the capital or voting rights of an issuer or investor.