Mauritius Stock Exchange

In 1989 Mauritius set up its own stock exchange under the Stock Exchange Act 1988. The exchange is regulated by the Financial Services Commission. There is an Official List with about 40 listings and an Over The Counter Market with about 80 traded companies. As of April, 2005, there are 40 companies listed on the Official Market representing a market capitalization of more than US$ 2.5 bn.

A new Securities Act passed in 2005 has yet to go into effect.

Electronic clearing and settlement was introduced in 1997, and a Centralised Depository System was implemented in 1998 which allows delivery versus payment (DVP) on a T+5 day rotating basis. The establishment of a clearinghouse, through the Bank of Mauritius, provides for a guarantee fund, which incorporates measures for securities and fund settlement failure. The Stock Exchange in collaboration with international advisers has also drafted new listing and reporting rules to ensure greater transparency for investors.

An Automated Trading System (SEMATS) was launched on 29th June 2001. It constitutes a state-of-the-art electronic trading system built on third generation technology. SEMATS put an end to traditional trading patterns which had typified the Stock Exchange of Mauritius since its inception. Trading in securities is conducted through dedicated trading workstations located at stockbroking firms and linked by communication lines to the SEM trading engine.

The Exchange was recently promoted from the status of 'corresponding exchange' to that of Affiliated Securities Market within the Fédération Internationale des Bourses de Valeurs (FIBV). Mauritius is also a member of the African Stock Exchanges Association (ASEA).

The market was opened to foreign investors after the lifting of exchange controls in 1994; foreigners are limited to individual holdings of not more than 15% in sugar companies, but are not otherwise limited unless they attempt to gain legal or management control of a Mauritian company (see Business Environment below). Settlement can be made in foreign currency; there is no capital gains tax and no withholding tax on dividends from companies on the Official List.

In September 2006, the SEM said it planned to launch an Alternative Development Market in early 2006.

CEO of the Mauritius Stock Exchange (SEM), Sunil Benimadhu said that the new market will allow the SEM to contribute to the process of empowerment of entrepreneurs and the government's goals for the 'democratisation' of the Mauritian economy.

The SEM joined the World Federation of Exchanges (WFE) in November, 2005. According to Mr Benimadhu, membership of the WFE will very much assist the Exchange in attracting foreign investors, and indeed the SEMTRI index gained 32 points in January, 2006, to close at a record high of 1,984 at the end of January. Capitalization of the exchange reached 81 bn rupees, representing 43.3% of GNP, with 22 million rupees arriving in the first two weeks of January alone.