BLC Chambers in Mauritius explain the process of soliciting persons in the country

Soliciting persons in Mauritius or from within Mauritius is a regulated activity, which is subject to high level of scrutiny by the Mauritius Financial Services Commission (FSC). Recently, the FSC has published Guidelines for Advertising and Marketing of Financial Products (Guidelines). The Guidelines regulate the advertising and promotion methods which licensed entities generally use to market financial products. They apply to all licensed intermediaries offering securities and other financial products in or from Mauritius, including via the global business sector. The Guidelines entered into force on January 1 2015.

Prior to the issue of the Guidelines, Mauritian law provided a general ban on ‘soliciting’ another person to enter into a transaction involving securities, but did not go as far as specifying the various forms of communication which could amount to ‘solicitation’. The Guidelines clarify both written and non-written forms of communication including internet advertisements, cold calls amongst others which would fall foul to the prohibition. In addition, the Guidelines regulate the content of advertisements in terms of specific disclosures or disclaimer requirements and inclusion of some specific data such as information regarding past or projected performance, rankings or awards received by the promoter. Marketing materials remain under the scrutiny of the FSC and for this purpose, a finalised copy must be submitted to the FSC prior to marketing to targeted consumers or to the public in general. Furthermore, the Guidelines have imposed some business conduct standards on promoters to act with honesty, fairness, integrity, professionalism and by preserving confidentiality of consumers.

The Guidelines also impose a duty on promoters of financial products to ensure at all times that the content of their advertising and marketing materials are compliant and in line with the Guidelines. Among the main highlights of the Guidelines is the potential exposure of the promoter of financial products to regulatory actions (for example, directions may be given by the FSC), and on conviction, liability to fines not exceeding MauR500,000 ($14,409) and/or imprisonment for a term not exceeding five years in the event of non-compliance with the Guidelines.

These Guidelines are helpful as they fill in some gaps in the law and bring conduct of business regulation in the capital markets a step closer to best international practices worldwide. They also aim at ensuring that promoters of financial products do not indulge in misleading or deceptive conduct in soliciting investors and ensuring that advertising follows honest, legal, decent and truthful standards.