The Financial Services Commission (FSC) of Mauritius has issued a regulatory clarification that carries significant implications for investment dealer companies and brokers operating from or through Mauritius: local investment companies are not permitted to act as liquidity providers to other brokers or investment firms. At present, there is no authorisation framework in Mauritius that allows such activity — the sole exception being entities holding an investment banking licence.
As a direct consequence of this clarification, any Mauritius investment dealer company currently acting as a liquidity provider to other brokers or investment firms is operating in breach of current Mauritius legislation. Affected firms should seek immediate regulatory and legal advice to assess their exposure and restructure their operations accordingly.
What the FSC Clarification Covers
The FSC's position confirms that the activity of providing liquidity — acting as a counterparty to other brokers by supplying bid/offer prices in financial instruments including forex, CFDs, and derivatives — falls outside the permitted scope of an Investment Dealer licence under the Securities Act 2005 and the FSC's existing authorisation framework.
The permitted activities under a standard FSC Investment Dealer licence (whether Full Service Dealer or Broker category) cover dealing in securities, intermediation in forex and derivatives transactions for clients, discretionary portfolio management mandates, and investment advisory. They do not extend to acting as a wholesale counterparty or liquidity provider to other regulated entities.
The FSC has confirmed that the Investment Banking Licence is the only current authorisation category under which a Mauritius-incorporated entity may legitimately conduct liquidity provision activities to other brokers and investment firms. The Investment Banking Licence carries materially higher capital requirements and a more demanding authorisation process than a standard Investment Dealer licence — reflecting the higher-risk, wholesale nature of the activity.
Who Is Affected
This clarification directly affects any Mauritius-based entity that:
- Holds an FSC Investment Dealer (Full Service Dealer or Broker) licence and is currently acting as a liquidity provider or market maker to third-party brokers or investment firms
- Has structured a group arrangement in which the Mauritius entity provides internal liquidity to affiliated brokers in other jurisdictions under a B-book or internalisation model
- Is marketing liquidity provision services to external brokers using a Mauritius investment dealer entity as the contracting counterparty
- Is in the process of establishing a Mauritius structure with the intention of conducting liquidity provision activities without first securing the appropriate licence category
Brokers using Mauritius-based entities as their liquidity source — whether within a group structure or on an arm's-length basis — should also review their arrangements, as the counterparty entity's regulatory breach may create compliance exposure for the receiving firm depending on its own regulatory framework.
Regulatory Risk for Non-Compliant Operators
Operating outside the scope of an FSC licence is a serious regulatory violation under Mauritius financial services law. The FSC has authority to issue directives, impose conditions, suspend or revoke licences, and refer matters for prosecution. The FSC has intensified its supervisory engagement with investment dealer licensees in 2024 and 2025, with increased focus on the actual activities being conducted relative to the licensed scope — making this clarification one that the regulator is likely to act on rather than simply note.
The reputational dimension should also be considered. Mauritius's position as a credible international financial centre depends on the FSC maintaining and enforcing the integrity of its authorisation framework. Entities found to be operating outside their licensed scope risk adverse outcomes that extend beyond the immediate regulatory penalty.
Structuring Options for Affected Firms
Firms currently affected by this clarification have several structuring options to consider, depending on the scale of the liquidity provision activity, the group structure, and the longer-term strategic objectives for the Mauritius presence.
Option 1 — Apply for an Investment Banking Licence in Mauritius. This is the direct solution where the Mauritius entity is the intended hub for liquidity provision. The Investment Banking Licence is the only FSC category that currently permits this activity. Zitadelle AG can advise on the application requirements, capital thresholds, and timeline.
Option 2 — Restructure the liquidity provision function to a different jurisdiction. Firms for which the Investment Banking Licence is not commercially appropriate may consider relocating the liquidity provision entity to a jurisdiction where this activity is covered under the applicable investment dealer or brokerage licence category. Labuan, Seychelles, BVI, and Cyprus each have different permitted activity scopes worth assessing against the specific business model.
Option 3 — Restrict the Mauritius entity's activities to its licensed scope.Firms for which liquidity provision is a minor or incidental element of the Mauritius entity's activities may find it operationally straightforward to cease the out-of-scope activity and operate the Mauritius entity solely within its authorised investment dealer parameters.
Mauritius Investment Licensing — Authorised Frameworks
For firms reviewing their Mauritius regulatory structure in light of this update, the current FSC authorisation options relevant to investment and brokerage activities are:
- Mauritius Investment Dealer Licence — Full Service Dealer (USD 500,000 minimum capital) and Broker (USD 100,000 minimum capital) categories. Covers dealing in securities, forex and derivatives intermediation, and portfolio management mandates. Does not permit liquidity provision to other brokers.
- Mauritius Investment Adviser Licence — Covers investment advisory and research services. Does not permit dealing or execution activities.
- Mauritius Fund Registration — CIS, private equity, and hedge fund structures under FSC authorisation. Appropriate for pooled investment vehicles rather than brokerage or liquidity provision operations.
Firms requiring an assessment of whether their current Mauritius structure is compliant with the FSC's clarified position, or advice on restructuring options, should contact Zitadelle AG for a confidential initial consultation.
How Zitadelle AG Assists
Zitadelle AG works with investment dealer companies, brokers, and financial services groups on Mauritius regulatory structuring — including FSC licence applications, activity scope reviews, compliance programme design, and cross-border restructuring where the Mauritius entity's role within a group needs to be reconfigured. Our representative office in Port Louis provides direct access to the local regulatory and legal environment.
For firms affected by this FSC clarification, we recommend acting promptly. The FSC's supervisory posture has strengthened considerably since 2023, and the window for voluntary remediation is typically more favourable than a position reached following regulatory contact.
Contact Zitadelle AG to discuss your Mauritius structure in confidence.
Last updated: April 2026. This article is for informational purposes only and does not constitute legal or regulatory advice. Contact Zitadelle AG or qualified Mauritius legal counsel for advice specific to your circumstances.