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    • Investor Protection & Complaint

Investor Protection & Complaint

The Stock Exchange of Mauritius Ltd (SEM) and the Central Depository & Settlement Co. Ltd (CDS) have in place various mechanisms for the protection of investors which include a compensation fund and guarantee fund. The purpose of the Compensation Fund is to compensate investors and other persons who have suffered financial losses as a result of the inability of a stockbroking company to satisfy claims arising from any civil liability incurred by it in connection with services provided, or as a result of fraud or defalcation by the company or any of its employees or officers, or as a result of insolvency.

The CDS Guarantee Fund ensures the financial integrity of market participants in the securities market. CDS guarantees that trades will be settled among participants (i.e. delivery of securities by the selling participant and payment by the buying participant). The Fund operates to satisfy any loss sustained by the CDS caused by a participant's failure to meet its obligations but does not protect clients against losses they may incur as a result of brokers' failure or malpractice. This is covered by the Compensation Fund as described above.

In addition to the mechanisms described above, the law and Exchange regulations also contain safeguards to ensure investor protection. Insider dealing and other forms of unfair market are prohibited by law. Moreover, Exchange regulations impose an obligation on directors, officers and employees of stockbroking companies to disclose their interests in securities to the market regulator. The Exchange has established separate dealing rules for its employees and directors. Stockbroking companies are also not permitted to effect trades for their own accounts in preference to client orders. Brokers cannot enter an in-house order where a client order exists in the order book.

Segregation between clients' money and brokers' accounts is also ensured as the Stock Exchange Act imposes on brokers the duty to open and maintain separate and distinct bank accounts in respect of amounts received for the purchase of securities and from the sale thereof (less any brokerage or other charges).

Regarding complaints, if an investor has a complaint concerning a commercial dispute between the investor and his/her stockbroking company or unsatisfactory service by the stockbroking company, the investor should first lodge the complaint promptly with the stockbroking company. If the investor fails to receive a satisfactory response after follow-ups with the stockbroking company, the investor may consider lodging the complaint with SEM directly. If the matter is purely commercial, there may not be anything the Exchange can do. But if it involves a breach of SEM’s rules, SEM can consider an investigation of that matter.

The focus of SEM’s initial investigation is regulatory in nature. If SEM is of the view that a breach of the Stock Exchange rules has occurred, the Exchange may commence disciplinary proceedings against the stockbroking company or take such action as permitted under SEM’s rules. However, investigations by SEM do not necessarily result in compensation to the investor by the securities broker or the withdrawal of civil proceedings by the stockbroking company to recover amounts owing.

Where a matter concerns possible improper conduct by the stockbroking company, or if the investor has information concerning an instance of market misconduct, including information on insider trading or market manipulation, the investor may consider lodging the complaint with SEM directly.

When do you lodge a complaint with your investment dealer (broker)?

If your complaint concerns a commercial dispute between you and your investment dealer, or unsatisfactory service by your investment dealer, you should first lodge your complaint promptly with your broker. If you fail to receive a satisfactory response after follow-ups with your investment dealer, you may consider lodging your complaint with SEM. If the matter is purely commercial, there may not be anything we can do. But if it involves a breach of our rules, we can consider an investigation of that matter.

When do you lodge a complaint with SEM?

Where a matter concerns possible improper conduct by your broker, for example, your broker had executed trades in your account without your approval, you may consider lodging your complaint with SEM.

 

You can either call at the SEM (212 9541) or send your complaint letter at the following address:

 

Stock Exchange of Mauritius Limited

4th Floor, One Cathedral Square Building

Jules Koenig Street

Port Louis

 

or email it us via SEM's e-page https://www.stockexchangeofmauritius.com/contact-us

 

When filing a complaint, please include the following information:

- your name, address and contact numbers where you can be reached should we need to clarify your complaint with you;

- the name of the investment dealer and the individuals at the firm with whom you dealt;

- a description of the alleged improper conduct; the date/dates when the improper conduct took place and the details of the transactions involved.

 

The focus of our initial investigation is regulatory in nature. If SEM is of the view that a breach of the Stock Exchange rules has occurred, we may commence disciplinary proceedings against the investment dealer or take such action as permitted under our rules. However, our investigations do not necessarily result in compensation to you by the securities broker or the withdrawal of civil proceedings by the investment dealer to recover amounts owing.

What should you do if you have information concerning specific instances of market misconduct?

If you have information concerning an instance of market misconduct, including information on insider trading or market manipulation, you can either call us (212 9541) at the SEM or send us by courrier at the address below:

Stock Exchange of Mauritius Limited
4th Floor, One Cathedral Square Building
Jules Koenig Street
Port Louis

or also email us via SEM's e-page https://www.stockexchangeofmauritius.com/contact-us

It would be useful for our initial investigation if you can provide the dates of the alleged market misconduct, the securities concerned, and the names of parties involved and their relationships.

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