Rules made by the Stock Exchange of Mauritius Ltd. under section 32(1) of the Stock Exchange Act 1988

1. Short Title
These rules are cited as the Stock Exchange (Conduct of Trading Operations) Rules 2001 made under the Stock Exchange Act 1988.

2. Interpretation

(1) In these rules, unless the context otherwise requires-

      "Act" means the Stock Exchange Act 1988.

      "ATS" or "ATS Service" means the software, hardware, communications and network systems, which are used to carry out exchange transactions or other operations related to exchange transaction.

      "CDS" means the Central Depository & Settlement Co. Ltd established under the CDS Act.

      "CDS Act" shall mean the Securities (Central Depository, Clearing and Settlement) Act 1996.

      "Official Bulletin" means an official publication of the SEM, which provides information about the trading volumes and prices of securities traded on the Stock Exchange and covers activities of the Stock Exchange, Stockbroking Companies and issuers.

      "Schedule" or "Schedule of Trading Procedures" means the procedures adopted by SEM and which form part of the rules.

      "FSC" means the Financial Services Commission established under section 3 of the Act.

      "SEM" means the Stock Exchange of Mauritius Ltd. provided for under section 14 of the Act.

      "Stockbroking Company" or "Stockbroking Companies" means a company licensed as such under the Act.

      "ATS Operator" means a stockbroker, a Dealer's Representative or a Dealer's Authorised Clerk.

(2) Words and expressions not defined in these rules shall bear the meaning ascribed to them in the Act or the CDS Act, as the case may be.

PART A - TRADING OPERATIONS

3. Trading Sessions

Trading on the Stock Exchange is conducted in trading sessions.

Trading sessions shall be conducted in hours established by the SEM and as set out in the Schedule. The SEM, after having informed the FSC officially, may change the time of the trading sessions after having published these changes in the Official Bulletin and in two newspapers of wide circulation not later than four business days prior to these changes becoming effective.

4. Supervision of Trading Sessions

Trading on the Stock Exchange shall be supervised and monitored by the Manager of the Trading Department or any other SEM employee appointed by the SEM.

5. Suspension of trading

Where in the opinion of the SEM, circumstances exist or are about to occur that could result in an unfair, unorderly and/or suspicious trading of securities, the SEM may suspend trading of any securities for one or more trading sessions or any part of a trading session. The FSC shall be informed forthwith.

Securities of companies which have been suspended from trading by the Exchange shall not be traded during the period of suspension.

All decisions to suspend or resume trading shall be communicated to all Stockbroking Companies through the ATS messaging system and the Official Bulletin of the SEM.

6. Schedule of Trading Procedures

Without prejudice to the requirements of these rules, the trading operations shall be carried out in accordance with the Schedule of Trading Procedures laid down by the SEM.

The Trading Procedures shall provide for:

(a) The trade matching mechanisms;
(b) The transmission and types of orders;
(c) Days and opening hours of the Stock Exchange trading sessions;
(d) Types of transactions concluded on the Stock Exchange;
(e) The types of Boards operated on the Stock Exchange; and
(f) The surveillance mechanisms of the Stock Exchange.

7. Trading of securities on 'cum' and 'ex' basis

For the purpose of trading, all securities will be traded and quoted 'cum' for a minimum of ten business days before the date fixed for the determination of entitlements known as the record date. On the next business day after the record date, the securities will be traded and quoted 'ex'. Buyers of securities who transacted on an 'ex' basis shall have no rights to the entitlements declared by the company concerned.

8. Buy-in on the Stock Exchange

In case of a Securities Settlement failure on Settlement date as defined in the CDS Rules, the defaulting stockbroking company shall be required to pay a daily fine of 0.05% of the value of the securities (marked to market daily) to the SEM until the buy-in is completed or the situation is corrected.

9. Unwinding of trades

In the case of a "Fund Settlement failure" or a "Securities Settlement failure" as defined in the CDS Rules and Procedures, trades already concluded on the Stock Exchange may be unwound pursuant to the CDS Rules and Procedures.

On a trade being unwound, the SEM shall rectify the volume and the traded value results pertaining to the day the trade was concluded on the Stock Exchange. The SEM shall publish the fact that there has been a failed trade on the market, indicating the name of the defaulting stockbroking company.

10. Official Price List and other market data information

The right to record and publish the prices related to stock market transactions is the prerogative and the sole property of the SEM. The copyrights of the SEM therein are reserved. No person may make a commercial use of the publication of the prices and any other market data information, in any form or manner whatsoever, unless prior written consent has been given by the SEM and on such terms and conditions for such use as the SEM at its absolute discretion shall impose.

In accordance with section 34 of the Act, the SEM shall publish information on the prices, the traded volumes and any other market data, which it deems useful to provide convenient information to the stockbroking companies and to the public.

The SEM shall determine the particulars to be published for all listed securities, and the form in which and the precise time within which the information is to be provided, as well as the means by which it is to be made available, having regard to the nature, size and needs of the market concerned and of the investors operating on that market.

PART B - STOCKBROKING COMPANIES

11. Obligations of Stockbroking Companies

Each Stockbroking Company shall keep and maintain records of the date and time of receipt of each client order.

A Stockbroking Company shall be solely responsible for the accuracy of details of orders entered into the ATS system in accordance with the Procedures.

12. Client's orders

An ATS Operator shall not buy or sell securities on or for its own account or on or for the account of a Prescribed Person as defined in these Rules while the ATS Operator holds an unexecuted order on the same terms from a client to deal in one or more such securities. For the purpose of this Rule, a limit order, which cannot be executed owing to price differences, shall be deemed not to be an unexecuted order.

For the purposes of this Rule, Prescribed Persons includes:

(i) The stockbroking company of the ATS Operator;
(ii) A director and shareholder of the stockbroking company;
(iii) An employee, ATS Operator or adviser of the stockbroking company;
(iv) Immediate families of any such directors, shareholders, employees, ATS Operator or consultants; and
(v) Family companies and family trusts of any one or more of such directors, shareholders, employees, ATS Operator, adviser, or their immediate families.

An ATS Operator which allocates a sale or purchase of securities to fulfil all or part if an order from a Prescribed Person for its own account when it has an unfulfilled order on the same terms for those securities form a client which is not a Prescribed Person shall contravene these Rules.

Each Stockbroking Company shall maintain a daily record of orders received from clients showing the name of each client, the specific order and the time the order was given. It shall be the duty of the stockbroking company to carry out the customer's orders promptly in a manner best suited to serve the customer's interest.

13. Access to the ATS Service

Only Stockbroking Companies which satisfy the requirements set out in Rule 14 shall deal in securities through the ATS Service.

14. Requirements for Stockbroking Companies

A Stockbroking Company shall at all times demonstrate to the satisfaction of the SEM that it meets the following standards:

(a) It has the financial resources to meet its obligations under these Rules or Procedures;
(b) It has adequate personnel, premises, communication and data processing capabilities, books and records to enable it to fulfil its obligations and operational requirements promptly and accurately; and
(c) It (i) satisfies all standards prescribed by the SEM, and (ii) submits all documents or information as the SEM may from time to time prescribe for the use of the ATS service, and the FSC shall be informed of any such prescriptions.

15. Security

Each Stockbroking Company is also responsible for taking appropriate and diligent security measures concerning its own personnel, physical access to computers and other equipment connected to the ATS and the confidentiality of usernames and passwords used to access the ATS computer system.

16. Acting on stockbroking companies instructions

Notwithstanding the fact that the SEM may require further confirmation before acting on an instruction from a Stockbroking Company, the SEM shall rely on and accept any written instruction, telecopied, telephoned or electronic message from any designated personnel of the Stockbroking Company. SEM is not required to verify the source of a telecopied, telephone or electronic message given in accordance with this Rule.

SEM is not responsible or liable for any act done or omitted to be done by it in good faith when relying on any message given in accordance with this Rule even if the message is proven to be erroneous, forged or ambiguous.

17. Exclusion of Liability

When acting in good faith and without negligence, the SEM shall not be liable to any Stockbroking Company or investor for:

(i) any loss of opportunity, profit, goodwill, interest or use of money or securities;
(ii) any other special, indirect or consequential loss, damage, expense, liability or claim;

which is suffered or incurred by any Stockbroking Company or investor arising from or related to the ATS Service.

18. Limitation of Liability

SEM's liability to any Stockbroking Company in respect of the ATS Service, for a loss not excluded by the Rules or arising from any other cause, shall in any event be limited to the net amount that the SEM recovers from its insurers or any other person for and in respect of that loss.

Where the aforesaid liability is incurred by SEM towards more than one stockbroking company or investor, the net amount recovered by the SEM as aforesaid is distributed among all such Stockbroking Companies and investors pro rata to their entitlement.

19. Failure

Where the SEM or a Stockbroking Company is unable to operate the ATS Service due to a system failure as laid down in Rules 20 and 21, or due to an Act of God or force majeure or any act outside the control of SEM, the SEM shall not be liable to pay any compensation or indemnity to any person who incurs a loss as a result of a delay in effecting any transaction.

20. Stockbroking Company system failures

A Stockbroking Company which has system problems, preventing it from updating its quotes or removing orders from the ATS, must inform the SEM immediately if it wishes to remove such orders from the system. After informing the SEM, it is not allowed to deal with its clients, including by telephone, on such quotes or orders until the system is operative again.

If a Stockbroking Company encounters a system problem which prevents it from accessing the ATS, it shall notify the SEM forthwith and an employee who is authorised by the Stockbroking Company to do so may request the deletion of all its orders on the ATS. The Stockbroking Company may also be authorised to access the ATS from a workstation located at the SEM's site.

21. ATS System Failure

When there occurs an event that prevents SEM to operate the ATS at its site, the SEM shall shift its operations to a "Disaster" Recovery Site in accordance with the Disaster Recovery Plan. Upon adequate notification, stockbroking companies shall ensure that that their authorised ATS Operator is present at the "Disaster" Recovery Site. The FSC shall be informed immediately upon the occurrence of such an event.

PART C - SUSPENSION OF STOCKBROKING COMPANIES

22. Misleading Acts and Conducts

A Stockbroking Company or Dealer's Registered Person shall not:

(a) do any act or engage in any course of conduct which creates or is likely to create a false or misleading impression as to the market in, or the price or value of any security;
(b) cause or enter into any artificial transaction;
(c) cause a fictitious transaction or a false price to be input into the ATS;
(d) effect a transaction at a price which differs to an unreasonable extent from available orders displayed by a stockbroking company;
(e) do any act or engage in any course of conduct which is likely to damage the image, the good repute, the fairness or the integrity of the stock market; or
(f) do any act or engage in any course of conduct which causes, or contribute to, a breach of the SEM's rules by another Stockbroking Company.

23. Suspension

When in the opinion of the SEM sufficient cause exists, the SEM may suspend the right of a stockbroking company to use the ATS Service until the SEM determines that the sufficient cause no longer exists. The FSC shall be informed forthwith.

Sufficient cause for suspension of a stockbroking company from the ATS Service exists when the SEM determines, an actual or imminent:

(i) unjustified non-performance of a material provision, or repeated breach of any provision of these Rules or the Procedures; and
(ii) revocation of the license or suspension of the stockbroking company by the FSC.

PART D - TRADING RULES AND PROCEDURES

24. Amendment of Rules and Schedule of Trading Procedures

The Board of Directors of the SEM may, with the approval of the FSC, from time to time amend these Rules and the Schedule of Trading Procedures. For the purpose of proposing and making any such amendment, the SEM shall promptly notify Stockbroking Companies and the CDS of any proposal to amend the Rules or the Schedule of Trading Procedures and of the text of the proposed Rule or Procedure and a brief description of its purpose and effect and their effective date and that such amendment shall be subject to the approval of the FSC. Stockbroking Companies and the CDS may, within the time prescribed by the Board of Directors of the SEM, submit to the SEM, for its consideration, its comments with respect to any such proposal, and such comments shall be filed in the SEM records and copies thereof shall be delivered to the FSC. The SEM shall give due consideration to the representations made and thereafter submit its proposed amendments to the FSC. The proposed amendments shall become effective as soon as the approval of the FSC is obtained or at such other date as the FSC may agree.

25. CDS Interface and Trading Rules

No amendments to the Rules or Schedule of Trading Procedures that will affect the interface between the ATS and the CDS or the CDS Rules and CDS Procedures shall be made without prior consultation with the CDS.

27. Request for Information by the FSC

Nothing in these Rules or the Schedule of Procedures shall preclude the FSC to require the SEM or any Stockbroking Company, pursuant to FSC's power under the Stock Exchange Act or any other enactments, to provide it with such document or information as it may require for the purpose of carrying out its objectives.