The Stock Exchange of Mauritius (SEM) made significant strides in enhancing its operational framework with the establishment of the Central Depository and Settlement System (CDS) in 1997. This system revolutionized the clearing and settlement processes for equities and debts by introducing centralized depository services. Its implementation aimed to mitigate inherent risks associated with trading while ensuring efficiency and promptness in transaction settlements.
The CDS operates through a sophisticated online computer system, granting direct access to participants. Trades are settled within a rolling T+3 cycle, adhering strictly to a Delivery versus Payment (DvP) basis. This methodology ensures that the final and irreversible transfer of funds occurs seamlessly through the Central Bank, facilitating same-day settlements.
Moreover, the CDS aligns with international standards such as the G3 Recommendations and CPS/IOSCO’s Recommendations for Securities Settlement Systems. These standards emphasize robust clearing and settlement procedures, enhancing market integrity and investor confidence in the Mauritian stock market.
In 2001, the SEM introduced new Listing Rules for companies listed on its Official Market. These rules, inspired by frameworks from the London Stock Exchange and JSE Securities Exchange (South Africa), aim to safeguard investor interests. They cover admission to listing, ongoing listing obligations, enforcement mechanisms, and procedures for suspension and withdrawal from the Official List. By harmonizing these rules with those of other bourses in the Southern African Development Community (SADC) region and the African Stock Exchange Association (ASEA), Mauritius seeks to attract foreign capital through cross-border investments and dual listings.
The objectives of the CDS and Listing Rules are multifaceted. They include conforming to international best practices, enhancing disclosure levels, providing flexibility in rule applications, minimizing regulatory duplication, and reflecting legislative amendments and corporate environment changes. These efforts collectively bolster investor confidence and foster a conducive environment for market growth and development.
Looking ahead, continued adherence to these principles will be crucial for sustaining Mauritius’ position as a reputable financial hub in the region. By maintaining robust infrastructure and regulatory frameworks, the SEM aims to attract diverse investors and companies seeking transparent and efficient capital markets in Africa.
