In line with the National Budget 2021-2022 and the ambition of the Mauritian Government to establish Mauritius as a hub for emerging technologies, the FSC issued the Financial Services (Crowdfunding) Rules 2021 on 10 September 2021 (Crowdfunding Rules). The operative date the Crowdfunding Rules is 04 September 2021.

The FSC's Chief Executive declared that the rationale of the Crowdfunding Rules is to offer 'new financial products/services' and to 'complement the Peer-to-Peer Lending Rules 1 that were issued last year' such that both 'frameworks will foster innovation and facilitate access to finance SMEs'.

The introduction of the Crowdfunding Rules in our legal landscape necessitated (i) an amendment to the Financial Services (Consolidated Licensing and Fees) Rules 2008 and (ii) the introduction of the Securities (Exemption) Rules 2021.

In effect, the Crowdfunding Rules legitimate the operation of a crowdfunding platform in Mauritius and provide for its modus operandi. Thus, in order to operate as a crowdfunding operator, a legal person must apply to the FSC for a licence to operate a crowdfunding platform in accordance with Part V of the Financial Services Act.

Crowdfunding platforms will be available to both retail and expert investors. In this regard, while a retail investor has a limit of MUR 350,000 [USD 8,200] over a 12-month period to invest, there are no corresponding investment limits for an 'expert investor'. On the question of definitions, an 'investor' designates 'the person providing funding to the issuer through the purchase of an investment in the issuer's business on the crowdfunding platform.' While the term 'expert investor' bears the same meaning as under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008, the term 'retail investor' designates anyone not being an 'expert investor'. Finally, an 'issuer' is an entity which seeks funding through a crowdfunding platform.

The two salient definitions under the Crowdfunding Rules are the terms (i) 'crowdfunding' which means the 'solicitation of funds from investors for a specific investment purpose through an online portal or electronic platform' and, (ii) 'crowdfunding operator' which designates a legal person licensed by the FSC to operate a crowdfunding platform.

The Crowdfunding Rules confirm the features of a crowdfunding operator as follows:

(a) its registered office and principal place of business must be in Mauritius;

(b) it must meet with the minimum unimpaired stated capital of MUR 2 million [USD 50,000] or its equivalent in any other currency or such higher amount as the FSC may determine;

(c) its governance structure must provide for an effective oversight of its activities;

(d) it must implement adequate internal controls and adopt strategies, policies and processes and procedures which are aligned with principles of sound governance and risk management;

(e) it must maintain a disaster recovery and business continuity plan to ensure that the necessary measures have been implemented to address disruptive and major events;

(f) it must set up and maintain at all times a risk management framework;

(g) it must set up a documented policy in relation to the outsourcing of any of its functions;

(h) it must maintain an updated transactional record of its clients;

(i) it must be managed by a board of directors comprising a minimum of 3 directors of which 30% must be independent directors and, of whom 1 must be resident in Mauritius;

(j) it must ensure that its staff comprise persons who are fit and proper and possess the appropriate competence, experience and proficiency to operate a crowdfunding platform and, that the staff is provided with the requisite training for the relevant functions which they hold.

As regards the modus operandi of a crowdfunding platform, the Crowdfunding Rules regulate the operational requirements which range from the question of reporting issuer, due diligence, handling of funds, the minimum investable amount and disclosure for instance. The Crowdfunding Rules come at an opportune time for the Mauritian International Financial Centre. Amongst other things, they confirm the ambition of the Mauritian Government to weather through the challenges of building a resilient economy through innovation and therefore promote emerging technologies as a way ahead to boost the Mauritian economy at a time when the world as a global village is still finding new ways to reinvent its economy in the un-precedented times which the COVID-19 has triggered.


1. please refer to the Appleby EAlert dated 03 September 2020 (The Financial Services Commission of Mauritius issues Peer to Peer Lending Rules)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.