Section 3: Central Depository, Clearing and Settlement Service

3. Central Depository, Clearing and Settlement Service (1) The Stock Exchange of Mauritius Ltd shall establish, in accordance with a scheme approved by the Commission, a central depository, clearing and settlement service to the Stock Exchange through a company registered under the Companies Act under the name of the Central Depository & Settlement Co. Ltd. (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 investment dealers through the scheme in accordance with the rules of the CDS. (b) The CDS may provide a settlement service in relation to eligible securities on any securities exchange other than those which are the subjectmatter of dealings referred to in paragraph (a). (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— (a) provide for a central depository, clearing and settlement service whereby, in accordance with the rules of the CDS— (i) documents evidencing title to securities, whether or not listed on the securities exchange (with, where applicable, in the case of shares or registered debentures, proper instruments of transfer duly executed) are deposited with the CDS and registered in the name of the CDS or its nominee; (ii) securities accounts are maintained by the CDS in the names of the depositors 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) — (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; and (d) provide for the 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. (7) The officers and employees of the CDS shall take the oath specified in the Schedule. [Issue 1] S8 – 4 Revised Laws of Mauritius (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 the CDS. (b) The assets of the Guarantee Fund shall consist of all money accruing lawfully to that fund and of such contributions as may be specified in the rules of the CDS. (c) The Guarantee Fund shall be administered in accordance with the rules of the CDS. (d) Where the CDS has made a payment from the Guarantee Fund in relation to any default, it shall, notwithstanding the fact that the CDS is not a counter party to the transaction between selling and buying participants, be subrogated to all the rights and powers of the defaulting participant for the purpose of the seizure and sale of unpaid securities and of operating the Guarantee Fund. [S. 3 amended by s. 156 (4) (c) of Act 22 of 2005 w.e.f. 28 September 2007.]