September 22, 2022

FSC issues updated to the guidance notes under its fintech series

Following the introduction of the Virtual Asset and Initial Token Offerings Services Act (“VAITOS Act”) in February 2022, the FSC has revised the following Guidance Notes to avoid any inconsistencies that they may have been with the VAITOS Act:


Guidance Notes

Initial date of issue

Salient points of the Revised Guidance Notes

Recognition of Digital Assets as an asset-class for investment by Sophisticated and Expert Investors

17 September 2018

ITO refers to an offer for sale to the public, by an issuer of virtual token offerings, of a virtual token in exchange for fiat currency or another virtual asset


Virtual Assets (VA) may constitute an asset-class for investment by the following categories of investors:

(a) Sophisticated investors

(b) Expert Investors

(c) Expert Funds

(d) Specialised Collective Investment Schemes; and

(e) Professional Collective Investment Schemes


Given the high-risk nature of VA, the FSC is of the opinion that investment in VA must be done by knowledgeable and financially knowledgeable investors only


VA are not legal tender in Mauritius though it can be used as a store of value


Investors choosing to invest in VA must do it at their own risk and are not protected by statutory compensation arrangements


Securities Token Offerings (STOs)

8 April 2019

Securities Tokens are digital representation of “Securities” as defined under the Securities Act 2005 (SA 2005).  VA do not include digital representation of Securities that fall under the purview of the Securities Act 2005


Any STOs conducted in or from Mauritius are subject to the laws and regulations of Mauritius (SA 2005, the regulations made under it and the FSC rules)


STOs can only be made with prior approval from the FSC except if made to the following:


(a)    Sophisticated Investors

(b)   Expert Investors

(c)    Expert Funds

(d)   Professional Collective Investment Schemes

(e)    Specialised Collective Investment Schemes


Any persons soliciting another person into entering transaction involving security tokens, must hold the relevant license from the FSC and must ensure strict compliance with the requirements including Undertaking adequate due diligence regarding the STOs and disclosure obligations



Given the high-risk nature of Security Tokens, the FSC urges investors to assess the risk prior to investing


Investors choosing to participate in STOs must do it at their own risk and are not protected by statutory compensation arrangements


Security Token Offerings and Security Token Trading Systems

15 June 2020

Security Token Offerings:


Issuers of Security Tokens include the following:


-        Entities registered as Reporting Issuers under Section 86(1) of the SA 2005

-        Collective Investment Schemes authorised as Expert Funds or Professional Collective Investment Schemes


Methods of offer are:

(a)    Public offer (where the securities are offered to the public via a prospectus which is registered with the FSC and the issuer is registered as a Reporting Issuer)

(b)   Preferential offer (where it is done via a private placement to either sophisticated investors or related corporations of the issuer)


Security Token Trading Systems (STTS):


Unlike traditional trading systems, the STTS does not require clearing and settlement facilities as they are usually prefunded allowing transactions to be cleared on T+0 basis


STTS can be accessed directly by clients without the need for a 3rd party intermediary (broker/agent)


Any person wishing to operate a STTS for security tokens transactions in Mauritius need to apply for a Trading Securities System licence


A STTS must:

-        maintain a minimum stated unimpaired capital of MUR 6.5 million (circa. USD 142k) at all times, in fiat currency

-        have professional indemnity insurance

-        have an Infrastructure Technology audit at least once a year and have sufficient Cybersecurity procedures in place

-        be managed and controlled from Mauritius

-        demonstrate adequate office premises and IT infrastructure from which it shall perform its core functions in Mauritius

-        be managed by a Board composed of a minimum of 3 directors, of which at least 30 % shall be independent directors and at least 1 resident director

-        Make use of custodians to hold both Securities Token and fiat currencies. For securities token, it should appoint a custodian licensed by the FSC or regulated in jurisdictions which are signatories to the IOSCO MMOU.  For fiat currency, it needs to appoint a commercial bank licensed in Mauritius



Investors choosing to participate in Security Tokens must do it at their own risk and are not protected by statutory compensation arrangements




The detailed guidance notes can be accessed on the website of the FSC – Click Here