Admission Requirements for listing on the Official Market
General Listing Requirements
A company seeking a listing on the Official List of the Stock Exchange of Mauritius Ltd (SEM) should:
- Demonstrate an adequate trading record with published or filed accounts for the three years preceding the application for listing;
- Have an expected market capitalisation of not less than Rs 20 million; and
- Issue at least 25% of the shares to the public, with a minimum of 200 shareholders, though this threshold may be phased in, with companies issuing 15% of their shares initially, increasing this proportion to 20% within three years and 25% by the end of five years.
Other listing requirements comprise the submission of various documentation, which provide detailed information on the company, an undertaking to conform to the Rules and Guidelines of the SEM, and Listing Particulars to be prepared prior to listing. The Listing Particulars must contain all information that are required in the Listing Rules to enable investors to be reasonably well informed about the securities likely to be listed and the issuer, including the following:
- The assets and liabilities of the issuer
- The financial position of the issuer
- The stated capital of the issuer
- The profits and losses of the issuer
- The directorships of the issuer
- The rights attached to the securities
- The prospects of the issuer
The SEM may, at its discretion and with the approval of the FSC, accept a minimum percentage in public hands of 10 per cent in the case of an issuer with an expected market capitalization which, at the time of listing, is either greater than the average weighted market capitalization of the second ten companies on the Official Market or is over MRU 2 billion.
However, the issuer will need to undertake to increase the shareholding in public hands to 20 per cent within the first three years of listing and to 25 per cent by the end of the fifth year of listing.
The Listing Rules apply as much to international issuers as they do to Mauritian issuers, subject to additional requirements, modifications or exceptions as set out in Chapter 15. While certain of these modifications apply to all overseas companies, other modifications will depend on whether the overseas company is seeking, or has, a primary or secondary listing in Mauritius. The primary listing will normally be in the country of incorporation or the country of first listing or the country in which a majority of the company's securities are held.
In deciding whether to authorise the omission of certain information which are generally required to be included in the Listing Particulars, the SEM will consider whether the issuer is listed on an overseas securities exchange and makes disclosure according to internationally accepted standards.
The SEM will also assess the nature and extent of the regulation to which the issuer is subject in its country of incorporation.
An international issuer with, or seeking, a primary listing on the SEM must comply with all the Listing Rules relevant to companies as modified by Rules 15.2 to 15.13 under Chapter 15. Where the Listing Rules refer to an issuer incorporated in Mauritius, the overseas issuer must nevertheless comply so far as the information available to it enables it to do so and compliance is not contrary to the law in the country of its incorporation.
An international issuer with, or seeking, a secondary listing on the SEM must comply with all the Listing Rules relevant to issuers as modified by Rules 15.2 to 15.13, and Rules 15.17 to 15.23 of Chapter 15 unless the SEM, after consultation with the relevant foreign regulatory bodies, otherwise agrees. However, the international issuer seeking a secondary listing on SEM will not need to comply with Chapters 11, 13 and 14 and the continuing obligations set out in Rules 12.14 to 12.23 (financial continuing obligations) of the Listing Rules.
Investment entities including global & specialised funds
An investment entity which is not registered with the FSC pursuant to the relevant provisions of the Securities (Collective Investment Schemes and Closed End Funds) Regulations 2008 will normally be expected to adhere to the fundamental principle of adequate spread of investment risk. Also the applicant will generally be a passive investor and must not control or seek to control the entities in which it invests. For these types of investment entities, which include, inter alia, investment companies, unit trusts or authorized mutual funds, the SEM may waive the requirement regarding the minimum number of 200 shareholders in appropriate circumstances but shall not waive the minimum percentage in public hands requirement of 25% except for investment entities which are open-ended. Within one year of the first marketing of its securities to the public, the investment entity must have a stated capital of MRU 20 million.
For investment entities authorized under The Securities (Collective Investment Schemes and Closed End Funds) Regulations 2008 and which include closed-end funds, global schemes, professional collective investment schemes, specialised collective investment schemes and expert funds, the admission requirements have been considerably alleviated for these types of entities based on the specificities of funds in general. While the continuing obligations relating to the above entities have also been considerably relaxed, the generic disclosure requirements relating to listed entities in general still apply.
For the above investment entities which are registered with the FSC or any other investment entity incorporated in a foreign jurisdiction acceptable to the SEM, the SEM may waive both the requirements regarding the minimum number of 200 shareholders and the minimum percentage in public hands of 25% in appropriate circumstances. Also, if the investment entity is not able to satisfy fully the conditions relating to audited accounts for three years and continuity of management, it must satisfy the SEM that its directors or its investment manager have sufficient and satisfactory experience in the management of investments of the type in which the company proposes to invest. However, the investment entity must, within one year of the first marketing of its securities to the public, have a stated capital of MRU 20 million.
To facilitate the listing of investment entities incorporated in a foreign jurisdiction and licensed by the relevant foreign regulatory body, the SEM has extended the waiver regarding the Private Placement Memorandum (PPM)/Prospectus, which was previously available to investment entities registered with the FSC only. Accordingly, the SEM will now accept the PPM already registered with the relevant foreign regulatory body within the 12 months prior to its application for a listing on the SEM.
Specialist Companies & Debt Instruments
Listing of Corporations holding a Category 1 Global Business Licence
Corporations holding a Category 1 Global Business Licence are treated differently from an entry perspective given that they operate under a specific legal regime and are subject to distinct tax, legal and regulatory requirements. Hence, the listing requirements under Chapter 18 have been relaxed as far as certain entry conditions are concerned to meet the specificities of the above corporations.
However, applicants for listing are reminded that compliance with the Listing Rules may not in itself ensure an applicant's suitability for listing and that the SEM retains a discretion to accept or reject applications. Before granting a listing, the SEM should be satisfied that the issuer and its business are suitable to allow the listing of its securities and that there is an adequate and open market in the securities for which listing is sought.
A corporation holding a Category 1 Global Business Licence must comply with the conditions for listing, as set out in Chapter 6, with modifications and additional conditions as provided under Chapter 18 of the Listing Rules. Accordingly, if the corporation is not able to satisfy fully the conditions relating to audited accounts of last three years or continuity of management, it must satisfy the SEM that its directors have sufficient and satisfactory experience in the management of global businesses. The corporation must also submit to the SEM a sound business plan, certified by an independent financial advisor acceptable to the SEM, covering at least 3 years and demonstrating clearly the sustained viability of the applicant. The applicant shall also disclose major risk factors.
For Category 1 Global Business corporations, the SEM may waive both the requirements regarding the minimum number of 200 shareholders and the minimum percentage of 25% in public hands in appropriate circumstances. However, the SEM shall not waive the market capitalisation requirement of MRU 20 million.
Listing of Specialist Debt Securities and Eurobonds
Specialist debt instruments which are being targeted to qualified investors offer a new span of possibilities to those entities seeking the benefits of listing on a recognised securities exchange and which may not be meeting our entry requirements as far as debt instruments in general are concerned. Qualified investors are special categories of investors who are knowledgeable and understand the risks involved in investing in those types of instruments and include but are not limited to expert investors as defined in the Securities (Collective Investment Schemes and Closed-End Funds) regulations 2008.
A new applicant which does not fulfill the entry requirement pertaining to a minimum period of 3 years' audited accounts may be accepted if the SEM is satisfied that such acceptance is desirable in the interests of the new applicant or of investors, and that investors have the necessary information available to arrive at an informed judgment concerning the new applicant and the securities for which listing is sought. The SEM may also accept an application from an applicant which does not have the minimum 3 years' accounts in case the application is in respect of guaranteed debt securities and the guarantor has published or filed audited accounts which cover at least three years.
The nominal amount of each class of debt securities for which listing is sought must be not less than MRU 25 million. The SEM may admit securities of lower value if it is satisfied that there will be an adequate market for the securities concerned or where listing is sought in respect of a further issue of debt securities which are or are to be uniform in all respects with debt securities of a class already listed.
Where an application for listing has been made for a class of debt securities under Chapter 18 of the Listing Rules, the condition that the securities must be in the hands of not less than 100 members of the public shall not apply.
Chapter 20 of the Listing Rules is targeted towards Mineral, oil and natural gas companies (collectively referred to as Mineral Companies). It should be noted that companies that are involved only in exploration for mineral resources and are not undertaking or proposing to undertake their extraction on a commercial scale are not suitable for listing under Chapter 20.
Chapter 20 aligns the existing Listing Rules with international standards for the Mineral industry, and ensures that Mineral Companies seeking a listing on the SEM’s platforms provide investors with material, relevant and reliable information that is particular to these specialist entities.
For Mineral Companies seeking a listing on the Official Market under Chapter 20, appropriate experience and technical expertise of management is mandatory, and a Competent Person’s Report on reserves and resources must be prepared by an independent and suitably Competent Person.
The reporting standards for Mineral Resources, Reserves and Exploration Results, which must be complied with by Mineral Companies seeking a listing under Chapter 20, are
(i) The JORC Code; or
(ii) NI 43-101; or
(iii) The SAMREC Code
or under other codes acceptable to the SEM, provided that the SEM is satisfied that they give a comparable standards of disclosure and sufficient assessment of the underlying assets.
In addition to this, a Mineral Company must ensure that any valuation of its Mineral Assets is prepared under the VALMIN Code, SAMVAL Code, CIMVAL or any other similar code acceptable to the SEM.
For Mineral Companies, the SEM may waive the requirement to have a minimum percentage of 25% in public hands in appropriate circumstances.
Chapter 19 of the Listing Rules makes provision for the listing of both sponsored and unsponsored issues of Depositary Receipts (DRs).
All DRs for which listing is sought on the Official Market of the SEM must be freely transferable and must conform with the law of the depositary’s place of incorporation.
For sponsored issues of DRs, key requirements for eligibility include 3 years’ published financial statements from the issuer, with at least 25% of the listed class of DRs in public hands, although these requirements may be waived in appropriate circumstances. A minimum of MRU 10 million market capitalization for all DRs to be listed is also required.
For unsponsored issues of DRs, the SEM will normally require the underlying securities to be listed on a securities exchange acceptable to it.
Exchange Traded Funds (ETFs)
Chapter 21 of the Listing Rules caters for the listing of Exchange Traded Funds (ETFs) on the Official Market.
ETFs are fully funded (unleveraged) securities listed on the SEM that track the performance of a specified security or other asset or group of assets, whcih include, but are not limited to, indices, commodities, currencies or any other asset accpetable to the SEM. The underlying asset or security referred to above must:
(a) be sufficiently liquid to satisfy the SEM that there will be proper price formation in the ETF; and
(b) have a net asset value that is calculated in a transparent manner and published on the issuer's website, where available and posted on the SEM's website.
Once application has been made to and approval granted by the SEM in relation to the issue of an ETF, those securities will be listed and traded on the SEM. ETFs will be traded in the same manner as any other securities on the SEM trading system. ETF trades will be settled through the CDS and must be freely transferable.
Application Process: Listing of Equity Securities
Equity securities are defined in the Listing Rules of the Stock Exchange of Mauritius Ltd as: “ shares (including, for the purposes of determining the appropriate rules applicable, preference shares), convertible equity securities and options, warrants or similar rights to subscribe or purchase shares or convertible equity securities.”
A new applicant must be duly incorporated or otherwise validly established according to the relevant laws of its place of incorporation or establishment, and be operating in conformity with its Memorandum and Articles of association or Constitution or equivalent constitutive documents. Where a company is incorporated in Mauritius, it must be and remain a public company. A new applicant must have published or filed audited accounts which cover at least 3 years and the latest accounts must be in respect of a period ended not more than 6 months before the date of the Listing Particulars. In exceptional cases the SEM may accept accounts in relation to a period of less than 3 years. Before submitting an application for listing, a new applicant may seek information and guidance from the Listing Division regarding the application process and listing requirements.
An issuer seeking listing on the Official List of the SEM shall:
(a) issue Listing Particulars which comply with both the prospectus requirements of the Securities Act 2005 (where applicable) and the contents' requirements for Listing Particulars as set out in Chapters 8 and 9 of the Listing Rules;
(b) make provision in its articles of association or Constitution for various matters set out in Appendix 4 of the Listing Rules; and
(c) enter into a Listing Undertaking in the form set out in Appendix 3 of the Listing Rules.
In gauging the suitability for listing of a new applicant, the SEM may have regard to the continuity of management of the new applicant throughout the 3-year period covered by the accounts mentioned above. For this purpose, the SEM will consider whether:
(a) The current executive directors have had, collectively, direct management responsibility for all the group's major businesses and key executive directors have played a significant role in the group's activities; and
(b) The senior management of the group taken as a whole has changed materially.
The directors of a new applicant which is a company must have collectively appropriate expertise and experience for the management of its business. The company must ensure that each of its directors is free from conflicts between duties to the company and private interests and other duties, which might be detrimental to the business or prospects of the applicant, unless the applicant can demonstrate that arrangements are in place to avoid detriment to its interests. Directors must also satisfy the SEM that they are of good character and integrity. To that effect, each director and proposed director of a new applicant will have to make a declaration and undertaking in the form set out in Appendix 5 of the Listing Rules and submit same to the SEM.
Securities are admitted to the Official List of the SEM when the decision of the SEM to admit the securities to listing:
(a) has been communicated to the applicant; and
(b) has been announced to the public by way of a press release by the SEM.
However, dealings in such newly listed securities shall only commence upon the happening of the following events (as applicable):
(a) the issue of the Listing Particulars (when required) within such time after the admission of the securities as may be determined after consultation with the SEM provided the approval from the SEM has been obtained; and
(b) the satisfaction of all conditions precedent to the issue of the securities (for example, the passing of all relevant resolutions at the issuer’s special meeting of shareholders or obtaining any necessary regulatory or governmental consent).
Where Listing Particulars are not required, nor are there any conditions precedent to the issue, dealings in newly listed securities shall commence upon the next business day after the events mentioned in paragraphs (a) and (b) above have taken place.
An issuer wishing to apply for listing in any of its securities must file with the Listing Division of the SEM a draft formal application for listing in the form set out in Appendix 1 of the Listing Rules and the initial application documents as set out in Listing Rule 7.11. The application shall be considered initially by the Listing Division, which shall then advise the Listing Executive Committee of the eligibility and suitability of the issuer for listing.
Final Application Documents
The applicant must lodge with the SEM (in a sealed envelope marked for the attention of the Secretary of the Listing Executive Committee) no later than midday at least three business days prior to the date of the Listing Executive Committee hearing, the final application documents as set out in Listing Rule 7.12.
Documents to be Lodged Later
The applicant must lodge with the Listing Division of the SEM as soon as practicable after the publication of the Listing Particulars but before dealings commence, the documents as set out in Listing Rule 7.14.