Wednesday, January 1, 2020
Examining The Security Market In Mauritius Example For Free - Free Essay Example
Sample details Pages: 12 Words: 3516 Downloads: 9 Date added: 2017/06/26 Category Marketing Essay Type Narrative essay Did you like this example? As provided under the Financial Services Development Act 2001, the Financial Services Commission administers The Stock Exchange Act 1988 and the Securities (Central Depository, Clearing and Settlement) Act 1996 and elaborates policies among others which are directed to ensuring the fairness, efficiency and transparency of financial and capital market in Mauritius. The Securities Act 2005  The Securities Act 2005 aims to enhance and upgrade the existing securities legislation. It also provides a wider and deeper coverage of the securities market in Mauritius and is based on standards recommended by the International Organisation of Securities Commissions (IOSCO). The main object of the Securities Act 2005 is to ensure a fair, efficient and transparent securities market and most importantly, to strike an appropriate balance between the protection of investors and the interest of the securities market. It establishes a framework for adequate regulation of securities market, market participants, self-regulatory organisations and for the offering and trading of securities. Don’t waste time! Our writers will create an original "Examining The Security Market In Mauritius Example For Free" essay for you Create order  The Securities Act 2005, which replaces the Stock Exchange Act 1988, draws on modern legislation in jurisdictions similar to Mauritius and is based on up-to-date regulatory and supervisory standards.  With the assistance of consultants from abroad, the Commission is currently developing regulations to give effect to the Securities Act 2005.   1.1      Who are the main players of the securities market?  The Stock Exchange of Mauritius The Central Depository Settlement Company Issuers CIS Intermediaries Investors (Institutions/Individuals local/overseas)  1.2      Who can have access to the securities market?  The securities market is open to local and overseas investors who have to use the services of the twelve stockbroking companies licensed by the FSC.  1.3       How is the market structured in Mauritius?  The Stock Exchange consists of two markets namely the Official Market and the Development and Enterprise Market, both under the management of the Stock Exchange of Mauritius.  The Official Market  The Official Market is reserved to companies that meet the criteria described in the Listing Rules regarding financial requirements, shareholders spread, and financial reporting. Trading takes place on a daily basis via a fully automated trading system, the Stock Exchange of Mauritius Automated Trading System (SEMATS).  As at end June 2007, there were 41 companies listed on the Official Market, 2 Authorised Mutual Fund, 1 debenture and a total of 51 securities traded (incl.T-Bills Debenture).  Trading is effected daily on both Markets.  Market Exchange Day Trading Hours Official Monday to Friday 10.00 a.m. to 12.30 p.m. DEM Monday to Friday 10.00 a.m. to 12.30 p.m.  The Development and Enterprise Market (DEM)  The Development and Enterprise Market, which is the second market of the Stock Exchange of Mauritius, was officially launched on Thursday 17 August 2006.  It is designed for Small and Medium-sized Enterprises (SMEs) and newly set-up companies which possess sound business plans and demonstrate good growth potential. The DEM is meant for companies wishing to avail themselves of the advantages and facilities provided by an organised and regulated market to raise capital to fund their future growth, improve liquidity in their shares, obtain an objective market valuation of their shares and enhance their overall corporate image.  Companies which were previously quoted on the Over-The-Counter (OTC) Market* have also been admitted on the DEM.  Two indices help to track the evolution of the DEM: the DEMEX, which is a price index, and the DEMTRI, which is a total return index.  The rules governing the DEM were approved by the Financial Services Commission on 25 May 2006.  These rules are less stringent than those of the official market. The trading of securities of DEM companies is effected through the SEM Automated Trading System (SEMATS), as per SEM Trading Rules and ATS Schedule of Procedures. All transactions are cleared and settled through the Central Depository Settlement Co Ltd (CDS) in accordance with CDS Rules and Procedures.  * The OTC Market was closed on Thursday 25 January 2007. More information on the Development and Enterprise Market   The Central Depository and Settlement Company (CDS)  Investors willing to trade in securities should open an account with the Central Depository and Settlement Company, or in the case of a sale, deposit the shares in CDS custody before trading. Orders are routed through a licensed stock broking company. Trading is conducted via the SEMATS which checks, validates and matches the orders on a price and time priority before establishing a pre-opening price. Thereafter the market shifts to a continuous trading mode where orders are entered in accordance with outstanding buy and sell orders. Prices can fluctuate between + / 15% on the official market and +/- 20% on the DEM for a trading day and is based on the reference price. All orders outside the permissible spread are rejected by the ATS.   Indices  The SEMDEX ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨The SEMDEX is the index of prices of all listed shares and each stock is weighted according to its share in the total market capitalisation. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨Thus, changes in the SEMDEX are influenced by changes in the prices of shares with relatively higher market capitalisation. In its computation, the current value of SEMDEX, is expressed in relation to a base period, which is chosen as the 5 July 1989, with an index value of 100.  The SEM-7  The SEM-7 comprises the seven largest eligible shares of the Official List, measured in terms of market capitalisation. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨Only shares which meet liquidity and investibility criteria are eligible for inclusion in the SEM-7. Maintenance of the index is ensured by an independent Index Management Committee. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨ The Index Management Committee (composed of stockbrokers, fund managers, academics, and officials from the Stock Exchange of Mauritius) ensures that the process of building and maintaining the SEM-7 is as interactive as possible. ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨ The Stock Exchange of Mauritius Total Return Index (SEMTRI) ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨The Stock Exchange of Mauritius (SEM) has launched a Total Return Index in 2002, the SEMTRI, whose main purpose is to provide domestic and foreign market participants with an important tool for performance measurement of the local market. Besides capturing the price movements of listed stocks, common to the already published all-share index SEMDEX, the Total Return Index, SEMTRI, incorporates the added feature of providing investors, in general, and long-term investors like pension funds, in particular, a good measurement of total return which combines both capital gains/losses on listed stocks and gross dividends obtained on these stocks since the inception of the local stock market on 5 July 1989. Gross dividends are assumed to be re-invested in the stocks underlying the capital index, SEMDEX.  2.0      Licensing  2.1      By whom are stock market intermediaries licensed in Mauritius?  Stock market intermediaries (stockbroking companies, stockbrokers and dealers representatives) are licensed by the FSC.  2.2      How are licences of stock market intermediaries maintained?  The Commission keeps a register of all licences that are issued under the Stock Exchange Act 1988. This register contains the following:  Â ·Ãƒâ€šÃ‚       Name of the licensee;  ·Ãƒâ€šÃ‚       Business address of the licensee;  ·Ãƒâ€šÃ‚       Name under which the licensee carries on his business; and  ·Ãƒâ€šÃ‚       Nature of the licence held by the licensee.  2.3      Who deal in securities?  All dealings in securities on the Stock Exchange of Mauritius are carried out by stockbroking companies which are licensed by the FSC.   2.4      Licensing of stockbroking companies           No company will be able to carry on the business of a stockbroking company or hold itself out as carrying on such a business unless:  1.                 it is the holder of a licence granted by the FSC 2.                 at least two of its officers are duly licensed stockbrokers  2.5      What are the obligations of a stockbroking company?  Every stockbroking company must:  Â ·Ãƒâ€šÃ‚       have and maintain at all times a minimum paid up capital of Mauritian Rupees 500,000;  ·Ãƒâ€šÃ‚       have as directors and other officers persons of good financial standing and integrity;  ·Ãƒâ€šÃ‚       pay such contributions for the purpose of the Compensation Fund and insurance;  ·Ãƒâ€šÃ‚       must provide an auditors report within three months after the end of each financial year;  ·Ãƒâ€šÃ‚       comply with the provisions of the Stock Exchange Act 1988 as amended and such rules that are made by the Stock Exchange of Mauritius Ltd;  ·Ãƒâ€šÃ‚       satisfy other conditions as the Minister may, upon the recommen dations of the FSC, prescribe.   2.6             How can a stockbroker or a dealer representative licence be obtained?  (a)   To act as a stockbroker or a dealer representative, a person must be duly licensed by the Commission under section 23 (1) of the Stock Exchange Act 1988 as amended (b)  Every person who is a stockbroker must furnish, immediately upon his being licensed, a personal guarantee amounting to Mauritian Rupees 250,000.   2.7      What are the annual licence fees payable by stockbroking companies, stockbrokers and dealers representatives?  The annual licence fees payable by a stockbroking company, a stockbroker and a dealers representative are as follows:  Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Stockbroking Company ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..        Mauritian Rupees 2,000                        Stockbroker       ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬  ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦.. ..          Mauritian Rupees 1,000                       Dealers Representative ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..           Mauritian Rupees 1,000  There is a processing fee of Rs 200 to be paid with each application.  2.8      What are the procedures for application and renewal of the licences of stockbrokers and dealers representatives?  1.     Application for obtaining a licence of a stockbroker and a dealer representative must be sent to the Commission and must be accompanied by the prescribed fee(s); 2.     Licences are renewed on a yearly basis by the Commission subject to terms and conditions as it deems fit and as long as the requirements under section 23 of the Stock Exchange Act are duly satisfied; 3.     The FSC can under section 25 of the Stock Exchange Act 1988 require an applicant to supply further information as it considers reasonably necessary to determine his application.  2.9    How to become a stockbroker and a dealers representative?  The Commission conducts examinations for prospective stockbrokers and dealers representative who may apply for a licence under section 23 of the Stock Exchange Act 1988. Candidates must meet certain entry qualifications as prescribed under the Act and are required to have a basic understanding of:  1.     the regulatory framework of the securities industry and the Stock Exchange in Mauritius; and 2.     financial and investment analysis.  2.10    In what circumstances are licences usually not granted?  A licence for a stockbroker or a dealer representative cannot be granted if:  Â ·Ãƒâ€šÃ‚       the applicant does not have sound financial means or has been convicted of an offence involving fraud or other dishonesty;  ·Ãƒâ€šÃ‚       he does not satisfy the minimum entry requirements and has not passed the examinations that are prescribed by the FSC;  ·Ãƒâ€šÃ‚       he is an auditor of a public company;  ·Ãƒâ€šÃ‚       he is an employee or partner of a firm of accountants or business consultants providing auditing services; and  ·Ãƒâ€šÃ‚       he is the shareholder, officer or employee of more than one stockbroking company.  2.11    What types of accounts are maintained by stockbroking companies, stockbrokers and dealers representatives?  1.     They must under section 37 (1) of the Stock Exchange Act 1988 open and maintain a separate and distinct bank account in which all amounts received for the purchase and from the sale of securities (less any brokerage or other proper charges) must be kept.  2.     They must not withdraw any money from that bank account, except for the purpose of making a payment:  Â ·Ãƒâ€šÃ‚       to the person entitled thereto or his agent; or  ·Ãƒâ€šÃ‚       defraying brokerage and other proper charges.  2.12    Can the FSC inspect stockbroking companies?  Â Â Â Â Â Â Â Â Stockbroking companies must, when required by the FSC, furnish all such information and produce records or documents as may be required in order to ensure compliance with the relevant Acts falling under the Financial Services Development Act 2001 [section 26 (1)];  Â Â Â Â Â Â Â Â Pursuant to section 27 (2) (c) of the Financial Services Development Act 2001, a stockbroking company or other intermediaries which are licensed under the Stock Exchange Act 1988, may be required to produce for inspection, either at the business premises of the holders of the licence or at the Commission, all books, records, accounts and documents, as may be necessary.  1.                                          The objectives of on-site inspections are to ascertain compliance with relevant laws and regulations, check adherence to anti-money legislations and codes, assess market conduct (including fairness and transparency of dealings with investors and the public), appraise corporate governance practices and evaluate financial soundness and controls. Since January 2003, the FSC has started doing its on-site compliance testing regime which is on-going.  ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨ 3.0      Supervision  3.1      Supervisory responsibilities of the FSC with regard to the securities market  The FSC regulates the activities of the capital market operators namely:  Â ·Ãƒâ€šÃ‚        Stock Exchange of Mauritius Ltd  ·Ãƒâ€šÃ‚        Central Depository Settlement Company Ltd  ·Ãƒâ€šÃ‚        Unit trusts/CIS  ·Ãƒâ€šÃ‚        Approved Investment Institutions  ·Ãƒâ€šÃ‚        Investment clubs  ·Ãƒâ€šÃ‚        Stockbroking Companies  ·Ãƒâ€šÃ‚        Dealers Representatives   3.2      FSC also investigates and suppresses market abuses such as insider trading, price manipulation, money laundering.  Measures to detect and suppress stock market abuses ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¨The Commission supervises daily trading in real time via terminals linked to the Exchanges Automated Trading Systems ATS.  In the event unusual trading patterns are detected, or in the event of complaints and reports from the stock exchange company, preliminary enquiries are conducted to determine whether the trading gives rise to suspected cases of market abuses. Client details and records may be examined upon request from the CDS whereby a preliminary enquiry is conducted and if the situation warrants investigations are initiated.  In addition to trade watch mechanisms, the Commission has in place a set of regulatory tools to suppress market abuses, which include:  Â ·Ãƒâ€šÃ‚       Timely Dissemination of price sensitive information to the public via the press and the Exchanges ATS to allow investors to make informed choices. If necessary, trading on securities is halted to allow equal access to information to all market participants.  Â ·Ãƒâ€šÃ‚       Stakeholders compulsory reporting The Central Depository and Clearance Company has to submit to the FSC periodic reports including  trade settlement and clearance details.  Â ·Ãƒâ€šÃ‚       Continuous monitoring The FSC keeps track of all happenings, events, specific actions and decisions that may materially affect trading and market integrity.    Â Â Â Â Â Compliance and procedures manual  With growing threat from money laundering activities and terrorist financing, market intermediaries are encouraged to develop internal compliance and procedures manual for providing guidance to staff to detect fraudulent activities. To that end, FSC has issued a Code on the Prevention of Money Laundering and Terrorist Financing applicable to investment businesses (as revised in July 2005).  Stockbroking firms are required to observe the CDD procedures when dealing with their clients and to put the interests of their clients before their own.   Â ·Ãƒâ€šÃ‚                  Development of the SEM  Â Â Â Â The SEM is empowered under current laws and legislations to supervise:  Ø     Listing and trading activities. Ø     Monitoring trade data and member positions to detect abnormal trading activity Ø     Inspecting and monitoring the financial standing and integrity of stock broking companies. Ø     Ensuring compliance with the Stock Exchange Act 1988.  3.4      The Central Depository and Settlement Company  The Central Depository and Settlement Ltd (CDS), which started operation for the clearing and settlement of securities in January 1997, is governed by a set of legislations, rules and procedures to ensure fair practices and transparency. Since the establishment of the CDS in 1997, the rules and procedures have been amended regularly to cater for the changing securities market environment and for the betterment of customers protection and services.  The CDS which is a subsidiary of the Stock Exchange of Mauritius, has extended its services to the companies on the DEM market. The CDS ensures strict delivery-versus-payment with a rolling T + 3 settlement cycle.  Under section 8(a) of the CDS Act, the CDS has an obligation to establish and maintain a Guarantee Fund for the purpose of providing an indemnity against any default in respect of payments fee or delivery of securities by any participant and of obligations of participants towards CDS. The Guarantee Fund is administered in accordance with the CDS rules.  Pursuant to section 18 of the CDS Act 1996, the CDS should, in accordance with the rules of the CDS, furnish to the FSC periodic reports on the activities and operations of the CDS.  In order to closely monitor risk factors and ensuring wider disclosure and transparency in the accounts of participants in the CDS, the Financial Resource Requirements were introduced by the CDS. They ensure that all participants maintain a sound financial position to meet their financial obligations.   4.0      Brokerage Fees  4.1      Equity Securities  The brokerage fee claimed by a stockbroking company to its client is as follows (see note (1) at bottom of Table 2):  Â ·Ãƒâ€šÃ‚       In respect of a transaction, other than a transaction relating to bonds or debentures, for a value specified in the first column of table 1 below, the total fee claimed is specified in the last column of table 1:  Â ·Ãƒâ€šÃ‚       The brokerage fees claimed is apportioned among the stockbroking company, the Stock Exchange of Mauritius Ltd (SEM), the Financial Services Commission (FSC) and the Central Depository Settlement Co Ltd (CDS) as specified in the second, third, fourth and fifth columns of Table 1, respectively;  Table 1:   Value of Transaction  Rs Stockbroking Company % SEM  % FSC  % CDS  % Total fee claimed for apportionment % Not exceeding 3 million 0.75 0.25 0.05 0.20 1.25 More than 3 million but not exceeding 6 million 0.70 0.25 0.05 0.15 1.15 More than 6 million but not exceeding 10 million 0.60 0.25 0.05 0.15 1.05 More than 10 million 0.50 0.25 0.05 0.10 0.90   4.2             Debt Securities  The following brokerage fee is applicable to transactions relating to bonds or debentures (See note (1) at bottom of Table 2):  The percentage of brokerage fee as specified in table 2 below is shared among the SEM, CDS and the Stockbroking Company as follows:   Table 2:  Value of Transaction  Rs Stockbroking Company % SEM  % CDS  % FSC  % Maximum Brokerage Fee % Not exceeding Rs 100,000 0.435 0.075 0.075 0.015 0.60 More than Rs 100,000 but not exceeding Rs 2 million 0.385 0.075 0.075 0.015 0.55 More than Rs 2 million 0.30 0.07 0.07 0.01 0.45   Note (1): In accordance with item 30 (C) of the First Schedule of the Value Added Tax Act, brokerage fees are exempted from the VAT.   5.0      Investment Instruments  5.1             FSC Approved Investment Funds  There are a number of open and closed end funds operating in Mauritius. Eight unit trusts including a listed open end fund have been authorized by the regulator. Ten closed end funds are listed on the Stock Exchange under investment category. There are a few authorized mutual funds which have been authorized to operate under the provisions of the Companies Act.  Unit Trusts  The Unit Trust Act 1989 provides for the establishment of open ended funds with the approval of the FSC. There are ten Unit Trusts operating in Mauritius if mutual funds and other registered funds are also included. Applications for the registration of Unit Trusts are processed and examined by the FSC which then grants authorisation once the requirements are satisfied as stipulated under the Act.           Â Â Â Â Â Â Â Â Â Â Â Approved Investment Institutions  Approved Investment Institutions are similar to Unit Trusts in so far as their objectives and operation are concerned but they are regulated by the Approved Investment Institution Rules 1994. These rules provide clear guidelines with regard to their investment strategy, investment mix, investment restrictions and overall management.  Authorisation for the setting up of Approved Investment Institutions is granted by the Minister responsible for financial services upon the recommendations of the FSC.  Â 6.0     Oversight of listed companies  FSC has limited control over listed companies. Oversight of listed companies is effected through the Listing Committee which applies and enforces the Listing Rules. FSC derives investigation powers under the Stock Exchange Act over certain defined market abuses, mis-selling and misleading prospectuses. Sections 33(4) (5) (6) and Sections 33A of the Stock Exchange Act do confer some power to the Commission but they are limited to false and erroneous statements in prospectuses and advertisements.  7.0      Opening up of the Stock Exchange  The opening up of the capital structure of the Stock Exchange of Mauritius to non-stockbroking companies constituted a major development. The move was at that time  in line with the demutualisation trend which characterised stock exchanges worldwide (1996).  There was also a need to pursue the objective of greater transparency in the running of the Stock Exchange. The eleven stockbroking companies, which held 100 per cent of the share capital of the Stock Exchange Company Ltd since its creation in 1989 sold 52.53 per cent of their shareholdings to some important players in the financial market. There are now about 25 companies, including the eleven stockbroking companies, which are shareholders of the Stock Exchange Company Ltd.  8.0             The Stock Exchange of Mauritius Automated Trading System (SEMATS)  The decision taken in 2001 to automate the Stock Exchange trading system was prompted by the need to develop a more efficient and transparent trading system and to improve the quality and flow of stock market information. Set up at the end of June 2001, the SEMATS puts an end to the floor-based open-outcry system since the inception of the Stock Exchange in 1989. The SEMATS constitutes a state-of-the-art electronic trading system built on third generation technology and designed for first class order-driven equity and debt markets.  The new trading system aims to:  Â ·Ãƒâ€šÃ‚        Improve market transparency  ·Ãƒâ€šÃ‚        Provide fair and efficient matching orders  ·Ãƒâ€šÃ‚        Enhance the variety and quality of market data and information  SEMATS operates on a price-time priority which allows a security to be purchased from the lowest offerer and sold to the highest bidder.  1.          Compensation Fund  Section 18 of the FSD Act 2001 provides for a Compensation Fund, out of which investors and other persons who suffer losses as a result of the inability by a person licensed under the Act, to satisfy claims from any civil liability in connection with services provided or compensated.  The Compensation Fund will, among others address situations where investors suffer pecuniary loss as a result of default committed by a stockbroking company or any of the directors or employees.  2.     Affiliation to the World Federation of Exchanges ( WFE)  The attainment of membership status of the World Federation of Exchanges (WFE), formerly Fà ©dà ©ration Internationale des Bourses de Valeurs (FIBV), on 1 November 2005 demonstrates that the SEM is operating in accordance with the principles established by the WFE and which constitute the hallmarks of well-regulated, operationally efficient and technically proficient Stock Exchanges. The SEM has also initiated different projects in order to develop the capital markets in Mauritius, attract more foreign investors and encourage cross-border investments.  Â Â Â Â Â Â Â Â Â Â Â  Â Â Â Â Â Â Â Â Â Â Â
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