Mauritius: SEM granted designation as a Recognised Stock Exchange by UK HMRC

The Stock Exchange of Mauritius (SEM) is pleased to announce that with effect from 31 January 2011, SEM has been designated by the United Kingdom’s Her Majesty’s Revenue and Customs (HMRC) as a “recognised Stock Exchange” under section 1005 (1) (b) Income Tax Act 2007. As a result of this development, securities admitted to trading and listed on the Official Market of the SEM will meet the HMRC interpretation of “listed” as set out in section 1005 (3) (a) and (3) (b) Income Tax Act 2007. Securities listed on the Development and Enterprise Market (DEM) of the SEM will not meet the HMRC definition of “listed”. Under this designation, SEM will also be regarded as a ‘recognised Stock Exchange’ for Inheritance Tax purposes.

SEM obtained this designation after undergoing a rigorous and in-depth application process to ascertain that the Exchange meets the requirements set out by HMRC in order to be designated as a ‘recognised Stock Exchange’. Speaking about this international recognition, SEM’s Chairman, Gaëtan Lan noted: “I am very pleased that SEM has satisfied the requirements of HMRC and been designated as a ‘recognised Stock Exchange’. This is a significant milestone that reinforces SEM’s international presence and confirms that the Exchange maintains rules, operating procedures and standards that are in line with international requirements. This international recognition fits very well with the numerous initiatives pursued by the Government of Mauritius and regulatory institutions like the Bank of Mauritius and the Financial Services Commission to position Mauritius as a well-regulated jurisdiction. This designation also follows the recent signature between the Government of Mauritius and the UK Government of a protocol for the upgrading of the exchange of information provisions in the Mauritius-UK Tax Treaty.”

SEM’s Chief Executive, Sunil Benimadhu, also commented on the HMRC designation stating, “The SEM is delighted to have been granted this important designation by HMRC. This status would enable securities and investment structures listed on the Official Market to obtain various tax-related exemptions from the UK by virtue of listing on SEM as a ‘recognised Stock Exchange’ and can potentially attract new business opportunities for Mauritius and for the SEM”.

SEM’s designation as ‘recognised Stock Exchange’ by HMRC confers the following key potential benefits:

• UK pension schemes will be permitted to hold securities listed on the Official Market of the SEM, giving companies and funds listed on SEM access to a larger market of sophisticated, well-capitalised investors.

• The designation reinforces SEM’s attractiveness as a listing venue for global funds and specialized products.

• Securities listed on the Official Market of the SEM may be held in taxadvantaged Individual Savings Accounts (ISA’s) and Personal Equity Plans (PEP’s) by UK investors.

• Holders of debt securities satisfying the Eurobond exemption and listed on the Official Market of the SEM are exempted from withholding tax on distributions underlying these debt securities.

• Inheritance tax advantages may accrue to UK holders of securities listed on the Official Market of the SEM.

• The designation reinforces the SEM’s position as a leading Exchange in Africa. The Stock Exchange of Mauritius (SEM) and the Johannesburg Stock Exchange (JSE) are currently the only two Exchanges in Africa designated as a ‘recognised Stock Exchange’ by HMRC.