BoM Proposes Guide for Issuance of Sustainable Bonds in Mauritius
BoM is consulting on a guide for the issuance of sustainable bonds in Mauritius, with the comment period ending on February 17, 2021. The guide on sustainable bonds provides an overview of the requirements and process for the issuance of sustainable bonds and the listing of these bonds on the Stock Exchange of Mauritius. The guide constitutes the first step toward the establishment of a framework for sustainable bonds. It not only seeks to ensure the integrity of the sustainable financing ecosystem in Mauritius but also to prevent greenwashing.
As part of a roadmap for the implementation of the 2030 Agenda for Sustainable Development, which Mauritius and other UN member states adopted in 2015, it was noted that achieving Mauritius’ ambitious national development priorities would require significant investments in sustainable development. One key recommendation in this context was the development of a green finance framework for Mauritius and the exploration of the issuance of innovative financial instruments, including green bonds. A technical committee was set up to work on the development of the domestic sustainable bonds market in Mauritius. The technical committee noted that providing clear guidance for issuers, investors, and intermediaries, such as verifiers, was a key step toward the establishment and development of a domestic sustainable bonds market. Thus, this guide has been published to ensure the integrity of the sustainable financing ecosystem in Mauritius. The guide is intended for information purposes only, to assist potential issuers in better understanding the legal and regulatory requirements for the issuance of sustainable bonds in Mauritius.
The guide defines different types of sustainable bonds, the entities that can issue them, and the reasons for issuing these bonds. As described in the guide, the labeled sustainable bonds universe includes green bonds (including blue bonds and climate bonds), social bonds, and sustainability bonds. The guide provides an overview of the general pre-issuance, issuance, and post-issuance process for a sustainable bond. This is followed by a description of the process for listing a sovereign sustainable bond as well as a sustainable bond issued by a company, on the Stock Exchange of Mauritius. Finally, the guide explains that non-compliance with one or more commitments undertaken under a sustainable bond issue subjects the issuer to the legal and regulatory sanctions, which may include a direction to ensure compliance with the certain regulatory guidelines. In the case of unlisted sustainable bonds, the Financial Services Commission shall communicate to the issuer the breach and authorize the issuer to take remedial steps to rectify the breach, subject to an agreed timeframe. In the case of listed sustainable bonds, in addition to the above, the Stock Exchange of Mauritius shall also communicate to the issuer the breach and authorize the issuer to take remedial steps to rectify the breach, subject to an agreed timeframe, failing which the Stock Exchange of Mauritius shall sanction the issuer as per the provisions of its Listing Rule/DEM Rules.
Comment Due Date: February 17, 2021
Keywords: Middle East and Africa, Mauritius, Banking, Securities, Green Bonds, Sustainable Finance, ESG, Climate Change Risk, Sustainable Bonds Framework, BoM
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
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