The European Securities and Markets Authority ("ESMA") has approved a Co-operation Agreement between Mauritius and the 27 EU Member States as well as Iceland, Liechtenstein, Norway and Croatia in the form of a Memorandum of Understanding ("MoU").

The MoU will provide the machinery for the exchange of information, oversight and application of the provisions of the AIFMD to be put into effect between EU Member States and the Financial Services Commission ("FSC") and is a pre-condition for Alternative Investment Fund in Mauritius to continue to be marketed into the EU in accordance with applicable private placement regimes.

The Chief Executive of the FSC, Ms Clairette Ah-Hen, stated that: "The ESMA MoU reaffirms the FSC's commitment to the highest standards in international engagement and information sharing. This milestone is set to contribute towards sustaining the Mauritius International Financial Centre (IFC) as an attractive jurisdiction for basing funds. The FSC looks forward to working with ESMA counterparts."

The key elements of the co-operation arrangements are as follows:

• ■ EU and third country regulatory authorities will be able to supervise fund managers that operate on a cross-border basis both within the EU and outside;
• ■ the co-operation between regulatory authorities includes the exchange of information, cross‐border on-site visits and assistance in the enforcement of the respective laws;
• ■ EU securities regulators will be able to share relevant information received from third country regulatory authorities with other EU regulatory authorities, ESMA and the European Systemic Risk Board, provided appropriate safeguards apply;
• ■ the existence of co‐operation arrangements between the EU and third country regulatory authorities is a precondition of the AIFMD for allowing managers based outside the EU to access EU markets or perform fund management by delegation from EU managers; and
• ■ the co-operation arrangements are applicable from the Transposition Date and enable cross-border management and marketing to professional investors of alternative investment funds.

In his reply on the 2013-14 Budget in the Lok Sabha on Tuesday, Indian Finance Minister P Chidambaram tried to woo foreign investors by saying that "Additional information can also be asked by the government but the TRC issued by a foreign government will be accepted as a certificate of residence,"

As per the Economic Times, "The apprehensions over TRC go back to a provision in the previous budget, for fiscal 2012-13, which made it mandatory for all foreigners to furnish a TRC from their home country to claim benefits under the double taxation avoidance agreement. But the language used in Budget 2013-14 spooked foreign investors, who saw it as a fresh provision that could empower tax officials to deny tax benefits to investments routed through Mauritius."

NDTV reported that a top Finance ministry official told the news agency, "The original sub section 5 of the Finance Bill has been omitted completely." and another official explained, ''This is to prevent any confusion for investments sheltered under Circular 789. But taxmen can call for information as per the respective DTAAs.''