The update enables a Securities Trading System (“STS”) to hold custody of Security Tokens:
- if it is demonstrated to the satisfaction of the FSC that the business model and infrastructure of the STS would not require the services of a separate custodian; and
- subject to such terms and conditions as the FSC deems fit.
- subject to such terms and conditions as the FSC deems fit.
The update also provides guidance on regulatory requirements for the issuance and trading of security tokens:
- including compliance with securities regulations, due diligence in token issuance, and the governance of STTSs;
- it emphasizes the importance of transparency in the issuance and trading of security tokens, and recommend that issuers and STTSs conduct thorough due diligence on investors and users to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations;
- and includes guidance on the application process for STO issuers and STTS operators, which requires authorization and registration respectively.
- it emphasizes the importance of transparency in the issuance and trading of security tokens, and recommend that issuers and STTSs conduct thorough due diligence on investors and users to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations;
- and includes guidance on the application process for STO issuers and STTS operators, which requires authorization and registration respectively.
The overall aim of the updated guidance notes is to promote responsible and sustainable practices in the use of blockchain technology for securities issuance and trading in Mauritius.
As a reminder, Security Token Offerings (STOs) and Security Token Trading Systems (STTSs) have been gaining traction in Mauritius as an alternative means of securities issuance and trading.
STOs are a form of fundraising that utilizes blockchain technology to issue security tokens that represent ownership in an asset or enterprise. STTSs, on the other hand, are trading platforms that allow investors to buy and sell security tokens.
The Financial Services Commission (FSC) in Mauritius regulary issues guidance notes on STOs and STTSs, providing clarity on the regulatory requirements for their issuance and trading.
Among these guidance, the FSC requires STO issuers and STTS operators to apply for authorization and registration respectively, and recommends thorough due diligence on investors and users to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.
For more information, please contact office@rosemont.mu