Insider Trading Probes on the Rise in Mauritius: Safeguards and Reporting Mechanisms

The Mauritian financial market offers robust protective provisions for investors. Here are some mechanisms in place to safeguard investors:

Protective Mechanisms

• Compensation Fund: Reimburses investors and other affected parties for financial losses due to various causes such as civil liabilities, fraud, defalcation, and insolvency.
• SEM Guarantee Fund: Ensures that trades are executed between market participants, guaranteeing the delivery of securities and payment.
• Legislation and Exchange Regulations: Impose additional safeguards, including the prohibition of insider dealing and market manipulation, and the requirement for stockbroking company directors, officers, and employees to disclose their securities interests.

Additional Safeguards

• SEM Dealing Rules: Prevent conflicts of interest for SEM employees and directors.
• Client Orders: Brokers cannot prioritize their transactions over client orders and are required to maintain segregated accounts for clients’ funds.

Complaint Handling and Investigations

For investors with complaints:

1. Exhaust all avenues with the stockbroker.
2. Commercial disputes may not be within SEM’s jurisdiction.
3. If an investigation reveals rule breaches, SEM may pursue disciplinary actions against the offending company. This may lead to fines and sanctions.

Reporting Concerns

For matters involving possible improprieties by the stockbroking company or insider trading information:

1. Report concerns directly to SEM.
2. Proactive reporting process can help prevent and detect market misconduct.
3. A vigilant investor community is essential for a healthy, fair, and transparent securities market.