The mechanics of buying and selling shares To buy or sell shares traded on SEM, your order must be placed with a stockbroking company, typically over the telephone or online via the internet. Orders to buy and sell shares are entered into SEM’s Stock Exchange Automated Trading System (SEMATS) by the stockbroking company. The orders are entered by approved operators within intermediate dealers’ offices using SEMATS terminals located in their offices SEMATS matches the buy and sell orders placed by stockbroking company. Each stockbroking company has in his office a computer terminal connected with a server located at the SEM. The central system software consists of an electronic order book which enables stockbroking companies to post their buy and sell orders on behalf of their clients. When an order is matched, the stockbroking company receives immediately a confirmation of the execution of the trade. Likewise investors, from the comfort of their home or office, can follow the stock market on a real-time basis and act on a real-time basis. Through SEM’s website (www.stockexchangeofmauritius.com), investors are able to access I-NET, the internet-based routing mechanism, assess the market situation and place orders to their stockbroking companies. These orders will then be validated by the stockbroking company and transmitted to SEM’s trading system for matching.
Standard procedure for buying and selling shares Buying securities
Selling securities
Buyer opens a CDS Account with an Investment dealer
Seller opens a CDS Account with an Investment dealer
Buyer places Buy order with Investment dealer
Seller places Sell order with Investment dealer
Sell order is entered into SEMATS
Buy order is entered into SEMATS
Orders are matched in SEMATS, i.e. the orders are executed and a trade is recorded
Investment dealer sends a contract note to Buyer
Investment dealer sends a contract note to Seller
Buyer pays buying Investment dealer by noon on T + 3
Investment dealer ensures that the seller has the securities in his/her CDS account
Market Settlement by CDS on T + 3 Securities are transferred electronically from the CDS Account of the seller to CDS Account of the buyer and simultaneously funds are transferred from the buying Investment dealer to the selling Investment dealer, through the Central Bank
Selling Investment dealer pays the Seller
Buyer receives a statement confirming the receipt of the securities
Seller receives a statement confirming the delivery of the securities
Placing an order with your Investment dealer (stockbroking company) In order to trade on the stock market, you should open a CDS account with a stockbroker who will request you to fill in the relevant forms. The Investment dealer (stockbroker) will be your main point of contact. If you wish to trade through iNet (internet trading) you should do same, i.e.register with a stockbroker. A Username and Password will be provided to you which will enable you to log on to iNet through the SEM's website and place buy and sell orders in respect of Listed equity instruments.
The trading market phases Trading at the Stock Exchange of Mauritius is divided into four main sessions, each with its own operating hours as indicated in the table below.
Trading Sessions
Time
Pre-opening
9.00 a.m. to 10.00 a.m.
Opening
10.00 a.m.
Continuous
10.00 a.m. to 13.30 p.m.
Closing
13.30 p.m
Publication of Market Information Sheet
14.30 p.m
When do you pay?
Your individual contract note will make it clear when you should complete your deal by settling your account. Within three days of your stockbroking company executing your order you will need to enable the transfer of these shares, either by organising payment for the stock you have purchased, or providing access to shares you have sold. Over time SEM has decreased time it takes for your trade to settle because all holdings are now registered electronically on the Central Depository & Settlement Company (CDS). CDS is a subsidiary of the SEM to provide a centralised depository, clearing and settlement service, and ensures that all trades are settled on a T+3 basis. That means transfer of ownership of the shares and related payments between the buyer’s broker and the seller’s investment dealer (stockbroking company) are completed on the third SEM business day after the trade takes place.
What does it cost ?
The costs will vary according to the type of service you choose and the size of the transaction. The brokerage fees claimed by an investment dealer (stockbroking company) to its client is set below for Equity and Debt securities. The brokerage fees claimed are apportioned among the investment dealer (stockbroking company), the Stock Exchange of Mauritius Ltd (SEM), the Financial Services Commission (FSC) and the Central Depository & Settlement Company Ltd. (CDS). Equity Securities Value of Transaction (Rs)
Investment Dealer (%)
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 0.70 exceeding 6 million
0.25
0.05
0.15
1.15
More than 6 million but not 0.60 exceeding 10 million
0.25
0.05
0.15
1.05
More than 10 million
0.25
0.05
0.10
0.90
0.50
Debt Securities Value of Transaction
Stockbroking company
SEM FSC
CDS
Max Brokerage fees
(Rs)
(%)
(%)
(%)
(%)
(%)
Not exceeding Rs 100,000 0.435
0.075 0.075 0.015 0.60
More than Rs 100,000 but 0.385 not exceeding Rs 2 million
0.075 0.075 0.015 0.55
More than 2 million
0.075 0.07
0.30
0.01
0.45