India-focused funds may soon get fast approval from Mauritius

Mauritius had been taking a bit longer to greenlight India-focused funds in the recent past, with the country’s financial services regulator busy in activities aimed at exiting the grey and black lists of the Financial Action Task Force (FATF) and the European Union (EU), respectively.

That may be about to change as Mauritius is done with most of its submissions and progress reports.

“After the EU’s decision to include it in the list of “high-risk” countries, the Financial Services Commission (Mauritius) has presumably taken a number of steps that include a thorough inspection of funds, holding companies and SPVs (special purpose vehicles) and implementing the new AML/CFT (anti-money laundering/countering the financing of terrorism) regulations. While the FSC’s efforts are in the right direction, there have been delays in processing new fund applications.

In May, the EU included Mauritius in its revised list of high-risk nations with strategic deficiencies in their AML/CFT frameworks. In February, Mauritius was included in the “grey list” of jurisdictions that require increased monitoring by the FATF.

Jurisdictions under increased monitoring actively work to address strategic deficiencies in their regimes. These are done to counter money-laundering, terrorist financing, and proliferation financing in a more efficient manner.

Market observers also said the approvals depended a lot on the funds themselves, and the extent to which they followed the new norms introduced last year.

The FSC had tightened rules for processing India-focused applications that included thorough checks on KYC information of new fund applications, as well as extensive background checks on fund sponsors and fund managers. The FSC was also reaching out to regulators of countries in which these sponsors or managers are based to verify their antecedents. In terms of processing time, by and large, the licences have been issued within the FSC SLA of four-six weeks from the date of submission.

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