Minimum Stated Unimpaired Capital for CIS Managers
Minimum Stated Unimpaired Capital for CIS Managers
Minimum Stated Unimpaired Capital for CIS Managers
Tuesday, July 1, 2014
- The stated capital was actually below the minimum requirement due to accumulated losses.
The FSC has established that the minimum stated unimpaired capital should be interpreted as "stated capital plus revenue reserves", i.e. stated capital plus retained earnings.
It has also been clarified that the stated capital should befully paidwhile determining whether the minimum stated unimpaired capital has been met.
Furthermore, to 'maintain' a minimum stated unimpaired capital of at least MUR 1 million or equivalent amount implies that the minimum requirement should be metat all times.
- In many cases, the financial statements showed that loans which had no contractual obligation are being treated as equity instruments. As such, although the shareholders' fund is more that MUR 1 million, the stated capital plus retained earnings is less than MUR 1 million.
In such cases, licensees are not in compliance with the requirement of Regulation 38(1) and necessary steps should be taken to meet the above definition of minimum stated unimpaired capital.