Mauritius becomes third African country to introduce pre-local operating unit
The CDS (Central Depository & Settlement) of the Stock Exchange of Mauritius is now an authorised Pre- Local Operating Unit (LOU) for issuing Global Legal Entity Identifiers to entities domiciled in Mauritius. (Image: Cecilia Samoisi)
Mauritius’ non-banking financial services regulator, the Financial Services Commission (FSC), has declared the CDS (Central Depository & Settlement) of the Stock Exchange of Mauritius to be an authorised Pre- Local Operating Unit (LOU) for issuing Global Legal Entity Identifiers to entities domiciled in Mauritius.
The fact that the CDS has been allocated the Pre-LOU authorization makes Mauritius only the third country in the African continent, after South Africa and Nigeria, to introduce this codification.
The LEI system is an alphanumeric code and associated set of six reference data items to uniquely identify a legally distinct entity that engages in financial market activities.
A global system that identifies legal entities across markets and jurisdictions is needed to ensure uniqueness.
“Following the 2008 global financial crisis which started in the United States and spread rapidly to Europe and the rest of the world, international regulators recognised the importance of the LEI as a key component of necessary improvements in financial data systems,” Vipin Mahabirsingh, Managing Director at CDS, stated.
According to him, the CDS has a strong track record since inception with no failed trade; no systems downtime; and no legal and regulatory issues.
On September 8, 2014, the CDS was attributed the prefix ‘1325’ by the Regulatory Oversight Committee of the Global Legal Entity Identifier (LEI ROC) after FSC Mauritius confirmed that the CDS meets all required conditions in terms of infrastructure, tools and processes.
Overall, the LEI is an important tool to assess systemic risk and maintain financial stability; conduct market surveillance and enforcement; supervise market participants; conduct resolution activities; prepare high quality financial data; and to undertake other official functions.
“In the African region, it is going to demonstrate that Mauritius is moving fast on ease of doing business. It is not an easy task and with all the work behind us, it will show a certain degree of success. It is a global initiative and needs to conform to global standards,” said FSC CEO Clairette Ah-Hen.
She added that they want to prove that Mauritius is a robust island economy which is capable of achieving international standards, and regulators need to comply with this system to recognise Mauritius as an international financial centre.
On the FSB Regional Consultative Group for Sub-Saharan Africa, FSC Mauritius represents the Mauritius jurisdiction – along with the Ministry of Finance and Economic Development and the Bank of Mauritius – and is committed to the adoption and implementation of best international practices.
It may be noted that the FSC Mauritius was awarded the membership status of LEI ROC on June 16, 2014 and that the ROC was set up earlier in January 2013 to coordinate and oversee the global system of legal entity identification around the world.
The ROC is constituted under the LEI ROC Charter which has been endorsed by the G20 and the Financial Stability Board (FSB).
It may be noted that the Central Depository & Settlement Co. Ltd (CDS) was established by the Stock Exchange of Mauritius in 1996 to provide centralized depository, clearing and settlement services for the Mauritian equity and debt markets. The company became operational in January 1997.
- By Marie Lorry-Coret and Cecilia Samoisi