CIS Fund (Open and close ended)

CIS Fund (Open and close ended)


Funds or Collective Investment Schemes (CIS) are structured as companies incorporated under the Companies Act 2001 and licensed as a company holding a Category 1 Global Business Licence under the Financial Services Act 2007. Fund should also obtain the appropriate authorisation under the Securities Act 2005. Such a structure, referred to as an Investment Company is defined as one where the company’s business consists of investing its funds mainly in securities with the aim of spreading investment risk and giving members of the company the benefit of the results of the management of its funds.

Global Funds registered with the Financial Services Commission of Mauritius are commonly incorporated as private or public limited companies under the Companies Act 2001 and licensed as a company holding a Category 1 Global Business Licence under the Financial Services Act 2007.

The law in Mauritius provides for two main categories of Global Funds:

  • Open-ended Fund, also known as a Collective Investment Scheme (‘CIS’); and
  • Close-ended Fund, commonly known as the Private Equity Fund.

We shall focus on the open-ended fund, commonly referred to as the Collective Investment Scheme (‘CIS’). The essential features that make a corporate vehicle a Collective Investment Scheme are:

  • Pooling of funds from various investors
  • Common investment of investors’ money into a portfolio of investments
  • Investments based on a diversification of risk principle
  • Redemption is at the option of the investors
  • The investors do not participate in the day-to-day management of the scheme


The FSC exercises its supervisory duties over the CIS within its jurisdiction by requiring the filing of quarterly accounts, covering NAV changes on a monthly basis, and the proceeds of shares issued and payment of shares redeemed, and of a half-yearly unaudited report and of a yearly audited report audited in accordance with IFRS or other internationally accepted accounting standards. The following matters must be covered in these reports:

  1. NAV per share;
  2. Number of shares outstanding;
  3. Statement of assets and liabilities including NAV;
  4. Details of investment portfolio and movements in the period disclosed by types of securities;
  5. Types of market analysed as a percentage of the CIS’s net assets.


Some characteristics are:

  • Whose sole purpose is the collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets as may be approved by the Commission
  • Whose operation is based on the principle of diversification of risk
  • That has the obligation, on request of the holder of the securities, to redeem them at their net assets value, less commission or fees where the participants do not have day to day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management
  • Includes closed-end funds whose shares or units are listed on a securities exchange; but
  • Does not include such schemes as are specified in Part II of the Schedule of the Securities Act 2005 (e.g. a scheme or arrangement operated by a person otherwise than by way of business, an arrangement out of a life policy under the Insurance Act, an occupational pension scheme, a debenture,

Categories of CIS

CIS – Global Scheme

To begin its operations, a Global Scheme must receive a minimum amount of subscription of at least 5% of the total amount to be raised from investors (or the amount prescribed under its offer document).

Should the minimum amount of subscriptions mentioned under the offer document not be reached during the first 6 months of the offering period, funds received must be refunded to investors together with any interests earned thereon, unless the CIS can justify an appeal for extension and the FSC agrees to such, which does not exceed a further 6 months.

CIS – Experts Funds

A CIS may be authorized by the Commission as an expert fund, in which case, it shall be available to expert investors only, i.e. an investor who makes an initial investment, for his own account, of not less than USD100,000 or is a sophisticated investor (e.g. statutory authority established by enactment, banks, CIS manager, investment adviser or dealer) or any similarly defined investor in any other securities legislation. The fund shall accept as investors, only such persons as the Board or CIS manager, where appointed, is satisfied are Expert Investors.

The CIS manager of an Expert Fund does not need to be resident in Mauritius. An Expert Fund may appoint a manager provided it holds a CIS manager licence issued by the FSC Mauritius or a licence issued by a regulatory body in a jurisdiction having comparable regulation as Mauritius for investor protection.

CIS – Professional CIS (PCIS)

A CIS may operate as a Professional CIS where it is offering its shares solely to sophisticated investors or as private placements. A PCIS is exempt from conforming with numerous provisions of the Securities Regulations provided that the shares acquired by its participants are not resold to the public and participants are advised of this limitation at the moment of subscription or otherwise the CIS is not listed for trading on a securities exchange, whether in Mauritius or elsewhere.

CIS – Specialized CIS

A specialized CIS is one that invests in real estate, derivatives, commodities or any other product authorized by the FSC.

A person wishing to start a specialized CIS shall apply to the FSC for a decision as to whether or not such a scheme would be authorized. Prior to giving a decision the FSC shall determine which of the regulations would apply, whether specific rules should be issued and the conditions that would apply to such a scheme.

 Closed-ended Fund (CEF):

A CEF refers to a scheme, other than a CIS, constituted in a legal form whose objective is to invest funds collected from subscribers during an offering by way of sophisticated investors in a portfolio of securities or other financial or non-financial assets or real property, as approved by the FSC.

A distinct feature of the CEF, as opposed to a CIS, is that an investor is not entitled to redeem its investments at any time. CEFs are more suited to Private Equity/Venture Capital Funds than Hedge Funds.

A CEF may appoint a CIS Manager or operate as a self-managed fund where the board of directors are subject to the provisions relating to a CIS Manager.


Categories of CEF

CEF – Reporting Issuer

The Securities Act define a reporting issuer as an issuer:

  • who has, by way of a prospectus, made an offer of securities
  • who has made a takeover offer by way of an exchange of securities
  • whose securities are listed on a securities exchange in Mauritius; or
  •  who has no less than 100 shareholders.

An issuer is a person or other entity that issues, has issued, or is going to issue securities. A prospectus refers to a notice, circular, advertisement or request inviting applications or offers from the public to subscribe for or purchase, or offering to the public for subscription or purchase, a share in, or debenture of, a company or proposed company; and includes a statement attached to or intended to be read with the prospectus.

CEF – Offering Under Party V

Part V of the Securities Act requires that no person shall make an offer to the public or distribute to the public, an application for an offer of securities unless a prospectus in a prescribed form has been provisionally registered with the FSC.

A person makes an offer or distribution to the ‘public’ where that person invites or solicit another person to:

  • (a) purchase or subscribe to securities never issued;
  • (b) enter into an agreement for the underwriting of securities;
  • (c) purchase securities underwritten;
  • (d) distribute securities previously offered without a prospectus; or
  • (e) purchase securities, other than securities acquired on a securities exchange in normal market operations, previously issued and held by a person, including and issuer and where the offer or distribution is made from Mauritius or received in Mauritius.


CEF – Professional CIS (PCIS)

CEFs which are not listed or do not make public offerings or do not have at least 100 shareholders are classified as PCIS in terms of Regulation 75(2) and are subject to requirements applicable to PCIS.