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CDS > CDS Act Act No. 30 of 1996 ARRANGEMENT OF SECTIONS 1. Short title 2. Interpretation "Commission" means the Financial Services Commission established under the Financial Services Development Act 2001; [Amended by the FSDA 2001] "Companies Act" means the Companies Act 2001; "company" has the same meaning as in the Companies Act; "court" has the same meaning as in the Companies Act; "CDS" means the Central Depository & Settlement Co. Ltd approved pursuant to section 3 of this Act "deposited securities", in relation to the CDS, means securities- (a) in relation to which the documents evidencing
title to the securities are deposited by a depositor with the CDS and
are registered in the name of the depository or its nominee; and "Depository Register" means a register maintained by the CDS in respect of deposited securities; "depositor" means the persons who are named as depositors in the Depository Register; "derivative instruments" in relation to debentures, stocks and shares, includes warrants, transferable subscription rights, options to subscribe for stocks or shares, convertibles and such other instruments as the Minister may prescribe; "eligible security" means a security made eligible to the operation of the settlement service or the depository service in accordance with the rules of the CDS; "entity" includes a company, partnership, association, government and agency thereof; "Guarantee Fund" means the fund established under section 3 (8)(a); "instrument" means a deed or any other instrument in writing; "issuer" means a person who issues any security; "listed securities" means securities which have been admitted for quotation on the Official List; "listed issuer" means an issuer in relation to which securities have been admitted for quotation on the Official List; "Minister" means the Minister to whom responsibility for the subject of financial services is assigned; "Official List" means the Official List established under the Stock Exchange Act 1988; "participant" means an entity which has with the CDS to use the depository service or settlement service and which is continued, reinstated or remains as a participant; "Register" means the Registrar of Companies; "rules of the CDS" means rules and any amendments thereto made by the CDS under section 3(5) (b) and approved by the Commission; "securities", in relation to this Act, means a security under the Stock exchange Act 1988, a share, participation or interest in property, rights or an enterprise of an issuer, an obligation of an issuer, any right to acquire such share, participation, interest or obligation of a type commonly recognised as a medium for investment or dealt in upon a securities exchange or organised market including a derivative instrument and includes uncertificated securities; "securities account" means an account established,
in accordance with the rules of the CDS, by the CDS for a depositor or
a participant for the "settlement" means the settlement of transactions in accordance with the settlement service; "settlement service" means the service offered by CDS whereby CDS, in accordance with its rules, provides facilities for the reporting and comparison of data respecting the terms of settlement of transactions, the reduction of the number of settlements of transactions, the allocation of settlement responsibilities, and acts as an intermediary in facilitating payments and deliveries of or in connection with transactions; "Stock Exchange" has the same meaning as in the Stock Exchange Act 1988; "Stock Exchange Company" has the same meaning as in the Stock Exchange Act 1988; "transactions" means a transaction in eligible
securities on the Stock Exchange or otherwise permitted by the rules of
CDS involving eligible securities and which effects a deposit, sale, purchase,
loan pledge, gift, transfer, delivery or withdrawal of eligible securities,
a registration "uncertificated securities" means listed securities not evidenced by a certificate, the issue or transfer of which is registered or recorded in registers maintained for that purpose by or on behalf of the issuer. 3. Central Depository,
Clearing and Settlement Service (2) The approval referred to in subsection (1) shall be subject to such terms and conditions as may be determined by the Commission. (3) (a) All dealings on the Stock Exchange shall
be cleared and settled between and among stockbroking companies through
the scheme in accordance with the rules of the CDS. (4) The clearing bank for the settlement of funds in respect of transactions cleared through the CDS shall be the Bank of Mauritius. (5) The scheme shall - (ii) securities accounts are maintained by the CDS in the names of the depositor so as to reflect the title of the depositors to the deposited securities; and (iii) transfers of the deposited securities are effected by the CDS making an appropriate entry in the Depository Register of the deposited securities that have been transferred; (b) provide for the making of rules, including any amendments thereto, with the prior approval of the Commission, for the proper and efficient operation, management and maintenance of the central depository, clearing and settlement service to facilitate buying, selling and otherwise dealing in securities and the operations of the depository service; (c) not be amended except to such extent and in such manner as may be approved or, after consultation with the CDS, directed by the Commission for the purposes of this Act; (d) provide for confidentiality and protection of information and documents relating to the affairs of persons holding securities accounts with the CDS and relating to their securities accounts. (6) The CDS shall pay to such body, as may be directed by the Minister, such annual fee as may be prescribed by regulations made under this Act. (7) The officers and employees of the CDS shall take the oath specified in the Schedule. (8) (a) The CDS shall establish and maintain a Guarantee Fund for the purpose of providing an indemnity against any default in respect of payments for or delivery of securities by any participant and of obligations of participants towards CDS. (b) The assets of the Guarantee Fund shall consist of all money accruing lawfully to that fund and such contributions as may be specified in the CDS rules. (c) Where the CDS has made payment from the Guarantee Fund in relation to any default, then, notwithstanding the fact that the CDS is not a counter party to the transaction between selling and buying participants, it shall be subrogated to all the rights and powers of the defaulting participant for the purpose of the seizure and the sale of unpaid securities and of operating the Guarantee Fund. 4. Issue of uncertificated
Securities 5. CDS deemed not to be
a member (i) members of the company in respect of the amount of deposited securities (relating to the stocks or shares issued by the company) entered against their respective names in the Depository Register; or (ii) holders of the amount of the issuer's deposited securities (relating to the debentures or any derivatives instruments or other deposited securities but excluding stocks or shares issued by a company) entered against their names in the Depository Register. (2) (a) Subject to paragraph (c), nothing in this Act shall be construed as affecting the obligation of a company to keep- (i) a register of its members, and allow inspection
of the register, under the Companies Act; and (b) Nothing in this Act shall be construed as affecting
- (ii) the right of a depositor to withdraw his documents evidencing title in respect of listed securities from the CDS at any time in accordance with the rules of the CDS and to register them in his or any other name; or (iii) the enjoyment of any right, power or privilege conferred by, or the imposition of any liability, duty or obligation under the Companies Act, or in any other enactment or under any instrument or under the memorandum or articles of association of a company upon a depositor, as a member of a company or as a holder of debentures or any derivative instruments, except to the extent provided for in this Act or prescribed by regulations made under this Act. (c) A company shall be under no obligation to enter into a register referred to in paragraph (a) the names and particulars of persons who are deemed members or holders of debentures under subsection (1)(b). (3) Notwithstanding the Companies Act, a depositor shall not be regarded as a member of a company entitled to attend any general meeting of the company and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the general meeting. (4) Where securities which have been deposited with the CDS are forwarded by the CDS to the relevant registry of the issuer as provided by the rules of the CDS, the registry of the issuer, on receipt of the deposited securities from the CDS, shall confirm to the CDS, within the period specified in the rules of the CDS, the authenticity of the security certificates which have been deposited. 6. Withdrawal of security (2) Where an application for the withdrawal of a deposited security is made under subsection (1) and the appropriate notification and withdrawal documents are received by the issuer or its share registry in accordance with the rules of the CDS, the issuer shall by itself, or its share registry, notwithstanding the provisions relating to the issue of certificates under the Companies Act, complete and deliver to the CDS, for forwarding to the participant, all appropriate certificates in connection with the transfer of the securities within 14 days after the date of the receipt by it of the withdrawal documents. 7. Register of substantial
shareholders of a company (b) A company shall be under no obligation to enter into the names and particulars of persons deemed members under section 5(1)(b). (2) The CDS shall forthwith upon its becoming aware that any depositor is a substantial shareholder of an issuer notify the issuer and the Commission of that fact. 8. Maintenance of accounts (2) A record of an entry in a securities account in respect of a dealing in deposited securities shall be prima facie evidence of the matters so recorded. 9. Certification of names
of depositors (2) Any member of an issuer or any other person, may require the issuer to furnish him with a copy of the record of depositors or of any part thereof, but only so far as it relates to the names, addresses, and the number of securities held, on payment in advance of a fee prescribed by regulations, made under this Act. (3) The copy of the record of depositors or any part thereof, required under subsection (2), shall be supplied to the person who required such copy within a period of 14 days or within such longer period as the Registrar considers reasonable in the circumstances, commencing from the day after the date of receipt of the request by the issuer. (4) The Registrar may require the issuer, within the time specified in subsection (3), to furnish him with a copy of the record of depositors referred to in sub-section (2), without payment of any fee. 10. Transfer by depository [Amended by Companies Act 2001] (2) A transfer of securities by the CDS by way of direct-entry to a depositor under this Act shall be valid notwithstanding that the transfer is not accompanied by a proper instrument of transfer or that otherwise the transfer is not made in writing. (3) Under this Act, entries in relation to the transfer of securities may be made in respect of the same class of securities or interest therein as part of a fungible bulk and may refer merely to a quantity or par value of a particular security without reference to a certificate or bond number or the like and, in appropriate cases, may be on a net basis taking into account other transfers or pledges of the same security. 11. Depository to be
discharged from liability if acting on instructions (2) The CDS or participant, if acting in good faith and without negligence, shall be fully discharged of its obligations to the depositor by the transfer or delivery of deposited securities upon the instructions of the depositor. 12. Confirmation of transaction 13. No rectification
of Depository Register (2) Where in the memorandum or articles of association of a company it is provided that the company is entitled to refuse registration of a transfer of deposited securities, it may, in relation to any transfer to which it objects, notify the CDS in writing of its refusal before the transfer takes place and furnish the CDS with the facts upon which such is considered to be justified. (3) Where the CDS has had prior notice of the company's refusal under subsection (2), but not otherwise, it shall refuse to effect and to enter the name of the transferee in the Depository Register and thereupon convey to the transferee the facts upon which such refusal is considered to be justified. (4) Section 88 of the Companies Act shall not apply to any refusal to register a transfer under subsections (2) and (3). 14. Non-application of
provisions of bankruptcy and company liquidation (b) any disposition of the property of a person who is adjudged bankrupt after presentation of the petition for a bankruptcy order and before vesting of the bankrupt's estate in the Official Receiver shall be void unless done with the consent or ratification of the Court, those provisions shall not apply to any disposition of deposited securities. (2) Where the Court is satisfied that a party to the disposition, being a party other than the CDS, had notice that a petition had been presented for the winding up or bankruptcy of the other party to the disposition, it may award damages against that party on such terms as it thinks equitable or make such other order as the Court thinks fit, including an order for the transfer of deposited securities by that party but not an order for the rectification of the Depository Register. 15. Set-off (2) Upon terminating its agreement under subsection (1), the CDS may set off obligations between the insolvent participant and the CDS, in accordance with the provisions of the agreement, and if on termination there is a net termination sum owed to the CDS by the insolvent participant, the CDS shall be deemed to be a creditor of the insolvent participant in respect of that net termination sum. (3) The CDS may, notwithstanding any other enactment, realise assets of the insolvent or bankrupt participant pursuant to a pledge in favour of the CDS or pursuant to the rules of the CDS or guarantees established by the CDS in accordance with its rules. 16. Non - application
of the section 13 of the Companies Act (2) The Court may, on being satisfied that a disposition of deposited securities would in the absence of subsection (1), be void, on the application of the Registrar of Companies or any person, order the transfer of the shares acquired in contravention of section 13 of the Companies Act. 17. Charging or pledging
of securities (2) Where a request is made by a chargee or pledgee as provided under subsection (1), such request shall be supported by documents evidencing such charge or pledge in his favour. (3) The securities account maintained by the chargee or pledgee pursuant to subsection (1) shall be designated as the "Pledged Securities Account". (4) Where a charge or pledge over a deposited security has been discharged or released, the CDS or participant, as the case may be, shall, upon receipt of a notice in writing from the chargee or pledgee confirming the same, transfer the deposited security into the securities account of the chargor or pledgor. (5) The provisions relating to the transfer or withdrawal of deposited securities shall apply, mutatis mutandis, to securities in the "Pledged Securities Account". (6) Where a pledge of a security is effected in
terms of subsection (1), the entries in the records of the CDS
constitute- 18. Reporting to the
Commission (2) The CDS shall forthwith, on the date of settlement, inform the Commission of any trade that fails to settle on its settlement date and provide the Commission with details of such trade and the reasons, as known to the CDS for such failure. (3) Notwithstanding section 3(5)(d), where the Commission is conducting an inquiry in the exercise of its powers under the Stock Exchange Act 1988, or where the Commission conducts an inquiry into any breach of this Act or irregularity in the operations of the CDS or a participant, it may request in writing any information or document from the CDS, and the CDS or participant shall forthwith comply with that request. (4) The provisions of this section shall apply in addition to and not by way of derogation from any reporting obligation to the Commission which is required of the CDS under the rules of the CDS. 19. Compliance orders 20. Duty to take reasonable
security measures 21. Duty to maintain
secrecy (2) No person who has any information which, to his knowledge, has been disclosed in contravention of subsection (1), shall disclose the same to any other person, or make any use of such information for himself or any other person other than the CDS. (3) A person who contravenes this section shall commit an offence and shall, on conviction, be liable to a fine not exceeding 100,000 rupees or to imprisonment for a term not exceeding 5 years or to both. 22. Restriction on disclosure
of information by participants 23. Permitted disclosures (a) which the depositor, or his personal representative,
has given permission in writing to disclose; (c) for the purpose of instituting or, in the course of, any civil proceedings - (i) between the CDS or a participant and a depositor,
relating to the securities account of the depositor; or (d) to any person who makes a request in writing and who is duly authorised under any law to investigate into any offence, such disclosure being, in any case, limited to the securities account and affairs of the depositor suspected of the offence; (e) to the CDS for purposes of the compilation of its record of depositors or any part thereof under section 9 of this Act, or the register of substantial shareholders under section 7 of this Act; (f) to an issuer in respect of a record of depositors issued under section 9 of this Act; (g) for the purpose of enabling or assisting the Bank of Mauritius to discharge its functions under the Bank of Mauritius Act, the Banking Act or any other written law; (h) for the purpose of enabling or assisting the Commission to exercise any functions under this Act or the Stock Exchange Act 1988 or any other written law or under the rules of the CDS; (i) for the purpose of enabling or assisting the Registrar to discharge his functions under this Act or under the Companies Act; (j) for the purpose of enabling or assisting a stock exchange to discharge its functions in accordance with the rules of the CDS; (k) for the purpose of enabling or assisting auditors of the CDS and any participants to discharge their functions; (l) for the purpose of enabling or assisting an investigator under Part XII of the Companies Act to discharge his functions; (m) in a summary or collection of information, framed in such a way so as not to enable the identity of any depositor, to whom the information relates, to be ascertained; (n) where disclosure is otherwise required by and is given in accordance with the rules of the CDS. 24. Central depository
to provide assistance (2) An investigator appointed under Part XII of the Companies Act may, for the purposes of conducting any investigation under that Part, request the CDS in writing to provide the investigator with such information or document as the investigator and the CDS shall, notwithstanding section 3(5)(d), forthwith provide that information or document to the investigator. 25. Offences (2) The proceedings for any offence against this Act may be instituted by the Registrar or any person authorised by the Registrar. 26. Jurisdiction a Magistrate shall have jurisdiction to try an offence under this Act or any regulations made under this Act and may impose any penalty provided under this Act. 27. Regulations (b) by regulations, amend the Schedule. 28. Consequential Amendment "Clearing Service" means the clearing service established under the Securities (Central Depository, Clearing and Settlement) Act 1996; (b) inserting immediately after paragraph (a) in section 8 the following new paragraph - (aa) monitoring and regulating the operation of the central depository, clearing and settlement service established under the Securities (Central Depository, Clearing and Settlement) Act 1996; (c) deleting paragraph (c) in section 16
and replacing it by the following paragraph - (d) repealing section 31 and replacing it by the
following section - (e) repealing section 32(2)(g) 29. Commencement |
