Stock Exchange of Mauritius reduces transaction fees
With effect as from December 2013, SEM significantly reduced transaction fees on turnaround trades by 88% of the total brokerage fee from 1.25% to 0.15%. A turnaround trade on the SEM involves: (i) the selling of a security that has been purchased earlier during the same settlement cycle (i.e within 2 days of the initial purchase) to take advantage of an upward movement in the price of the underlying security, or (ii) the purchase of a security that has been sold earlier during the same settlement cycle (i.e within 2 days of the initial sale) to take advantage of a downward movement in the price of the underlying security, assuming that the investor holds the security in his/her securities account prior to the initial sale. This significant reduction in trading fees on turnaround trades for investors at large, is expected to increase the volume of transactions on the SEM over time, enhance active trading on the Exchange and boost liquidity. It will also reinforce the position of the SEM as an attractive listing, trading and capital-raising platform for local, regional and global issuers and contribute to the positioning of Mauritius as an attractive international financial services centre of substance.
Since December 2013, SEM also significantly reduced transaction fees on corporate bond trading by 83% from 0.60% to 0.10%. This sets the stage for active trading on corporate bonds. This initiative also enhances the attractiveness of investments in corporate bonds, facilitates exit from these instruments. It also potentially enhances the scope of further listings of corporate bonds on the SEM, setting the stage for the development of an attractive secondary market for corporate bonds.