This Guidance Note issued under section 7(1)(a) of the Financial Services Act 2007, highlights the regulatory approach of the FSC in relation to Securities Token Offerings (STOs)..
“Securities tokens” are “securities” as defined in the Securities Act 2005, represented in digital format.
An STO generally means the issue of Securities Tokens, as a method of raising funds from investors, in exchange for the ownership or economic rights in relation to assets.
When STOs are conducted in or from within Mauritius, the offering of such Securities Tokens shall be subject to the Securities Act 2005 and any Regulations or FSC Rules issued thereunder including the requirement for a prospectus, as may be applicable.
The prior approval of the FSC is required for an STO. However, no prior approval is required in respect of offerings to the following categories of investors:
- Sophisticated Investors
- Expert Investors
- Expert Funds
- Professional Collective Investment Schemes
- Specialised Collective Investment Schemes
COMPLIANCE & DISCLOSURE OBLIGATIONS
Any person soliciting another person to enter into transactions involving Securities Tokens shall be required to hold the appropriate licence under the Securities Act 2005 and shall be required to ensure, at all times, strict compliance with the applicable regulatory requirements, including, but not limited to:
- Undertaking adequate due diligence regarding the STOs: That is, conducting appropriate due diligence in view of developing a detailed comprehension of the STOs, the fitness and propriety of the management of the issuer as well as its development team and rights and obligations attached to the underlying assets backing the Securities Tokens.
- Disclosure obligations: That is, providing clients with information relating to the STO in an accurate, timely and transparent manner with clear warning statements about the risks associated with the Securities Tokens
If you wish to access the Guidance Note issued by the Financial Services Commission on the Securities Token Offerings (STOs), please click on ‘Learn More’.