The Stock Exchange of Mauritius Ltd (SEM), was incorporated in Mauritius on March 30, 1989 as a private limited company. The Stock Exchange of Mauritius Ltd., a privately owned organisation with a public mandate is committed to becoming a World Class Stock Exchange. The mission of the SEM is strive to position itself as a service-driven and operationally excellent organisation with world-class trading and settlement capabilities, which incorporate and maintain the fundamental principles of market integrity, investor protection and efficient price discovery.

The SEM operates two markets: the Official Market, on which securities of listed companies are traded, and the Over-The-Counter (OTC) Market. The Official Market started its operations in 1989 with five listed companies and a market capitalisation of nearly US $ 92 million. Currently, there are 41 companies listed on the Official Market representing a market capitalisation of nearly US$ 2,798.16 million as at 31 July 2006.

The stock market was opened to foreign investors following the lifting of exchange control in 1994. Foreign investors do not need approval to trade shares, unless investment is for the purpose of legal or management control of a Mauritian company or for the holding of more than 15% in a sugar company. Foreign investors benefit from numerous incentives such as revenue on sale of shares can be freely repatriated and dividends and capital gains are tax free.

A major development has been the successful implementation of a Central Depository System (CDS), in January 1997. The implementation of the CDS has brought about prompt, efficient clearing and settlement of trades and at the same time reduced some of the inherent risks in the process. With the support of the Bank of Mauritius which acts as clearing bank, CDS ensures delivery versus payment (DVP) on a T+3 rolling basis. The CDS also provides for a Guarantee Fund Mechanism to guarantee settlement failures of participants.

SEM's 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 puts an end to traditional trading patterns which have typified the Stock Exchange of Mauritius since its inception. Trading in securities is conducted through dedicated trading workstations located at intermediate dealers and linked by communication lines to the SEM trading engine.

Similarly, the trading of treasury bills on the market has been introduced by the SEM in December 2003, a first step of a process aimed at the setting up of an active secondary market for government instruments. New listing rules are underway in the setting up of an appropriate operational and regulatory framework to cater for the listing of offshore funds and international products.

The SEM will undertake an explanatory and marketing campaign in an attempt to make capital market activities more understandable and accessible to retail and institutional investors in Mauritius and sensitise them as well as those internationally about investment opportunities offered by the Exchange.

A further key undertaking will be the introduction of the Development & Enterprise Market (DEM) and the winding up of the Over-The-Counter (OTC) Market. The timetable for the launch of this New Market is set to be May 2006. The rules which will govern the listing of companies on this new market have already been drafted and approved by the Board of the Exchange. A detailed time-table has been finalised as well as a thorough marketing plan, incorporating the key milestones which will lead to the successful launch and implementation of this new market. DEM has been designed for companies currently quoted on the OTC market and growing companies with a sound business plan to facilitate their access to capital for future growth. It is an exchange-regulated market that offers access to the financial market with streamlined listing requirements and relatively easy-to-comply-with post-listing obligations for OTC and other medium-sized companies.