In this highlight, we provide a brief summary of the crowdfunding rules, emphasizing the key points set out therein.
In line with its strategy to sustain the growth of the Fintech ecosystem within the Mauritius International Financial Centre, the Financial Services Commission (FSC) has issued the Financial Services (Crowdfunding) Rules 2021, following the announcement in the 2019 - 2020 Budget speech.
These rules are effective as from 04 September 2021 and shall apply to any person operating a crowdfunding platform in Mauritius and must be read in conjunction with the relevant Acts and any guidelines which the FSC may issue from time to time.
The FSC expects that the new regulatory framework for crowdfunding will contribute to shape and improve access to finance for individuals, entrepreneurs, as well as Small and Medium Enterprises (“SMEs”) operating in or from Mauritius. Both retail and expert investors will have the opportunity to participate, in a regulated environment, to the growth of SMEs, thus bolstering entrepreneurial spirit in the jurisdiction.
A crowdfunding operator is required to apply for a crowdfunding operator licence pursuant to the Financial Services Act and operating a crowdfunding platform without a licence constitutes an offence.
A crowdfunding operator shall, inter alia,
In addition to Know Your Customer checks to be conducted under the AML/CFT legislation on the issuers and investors, a crowdfunding operator shall conduct a fitness and propriety check and legal due diligence on each issuer prior to allowing the issuer to raise funds using the crowdfunding platform as provided in the Rules.
A crowdfunding operator is required to enter into appropriate agreements with the issuer and investor to govern the main terms of the client-platform relationship.
An issuer shall offer to raise an amount not exceeding MUR 15 million on a crowdfunding platform over a 3-year period or such other period as may be approved by the FSC. The operator shall take reasonable steps to restrict an issuer from seeking funding on another crowdfunding platform during the commitment period.
A crowdfunding operator shall maintain effective systems and controls to ensure that, over a 12-month period, a retail investor does not invest an amount exceeding MUR 350,000 on the crowdfunding platform. No investment limit shall apply to expert investors.
 retail investor means any person who is not an expert investor.
 expert investor has the same meaning as in Regulation 78 of the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.
A crowdfunding operator may handle funds on behalf of investors. In case a crowdfunding operator acts as an intermediary in the collection of funds from investors, it shall keep and maintain separate bank accounts from its own accounts.
A crowdfunding operator shall disclose prominently on its platform:
All the disclosures to be made by the crowdfunding operator have been detailed in the Rules.
Should you require our expert services and need assistance on the implications of above new developments, we would be delighted to speak with you to discuss how Sanne can assist. Please contact Rubina, Bimal or Varounen directly.Our Expertise