Financial Services Alert – Spot Commodity Market Regulatory Framework
The Financial Services Commission (FSC) has released a new regulatory framework for Spot Commodity Market and its intermediaries.
The FSC has amended the First Schedule of the Financial Services Act to include following new financial business activities:
spot commodity market;
spot commodity clearing house;
spot commodity broker;
spot commodity broker’s representative;
spot commodity trading adviser; and
spot commodity trading adviser’s representative.
In order to facilitate the establishment of a new and dynamic ecosystem of spot commodity trading, clearing, and intermediation in Mauritius, the Financial Services (Spot Commodity Market and Intermediaries) Rules 2024 has been issued following a recent public consultation exercise. These Rules became effective on 09 February 2024.
The FSC has also issued the Financial Services (Consolidated Licensing and Fees) (Amendment No.2) Rules 2024 to offer appropriate processing and annual fees for services relating to spot commodity.
The FSC highlighted the following key features regarding the implementation of this new regulatory framework:
A fast-track application process for current license holders of the FSC engaged in activities such as securities exchanges, investment dealers or providing clearing and settlement facilities under the Securities Act and applying for corresponding spot commodity-related services under the new regulatory framework.
Spot Commodity Market may be operated through an electronic system or facility based on the advanced emerging technologies like distributed ledger technology.
In alignment with environmental, social and governance related policies, as well as other legislative frameworks in Mauritius, operators may also engage in spot commodity trading, clearing, brokerage or advisory services for energy or environmentally-related financial instruments which are deemed as carbon offsets.