Mauritius releases new regulations for security token trading

Mauritius releases new regulations for security token trading

Regulators in Mauritius have released new guidelines for security token offerings and trading as part of a wider effort to become a fintech hub for the region.

According to the communiqué last week, the Mauritius Financial Services Commission (FSC) announced the creation of guidelines for STOs under the provisions of the country’s Financial Services Act of 2007.

The new guidelines provide a framework for both security token offerings and trading with detailed compliance requirements for all participants in these emerging markets.

The FSC stated that the move makes Mauritius the “first jurisdiction globally to offer a regulated landscape for the custody of digital assets.”

Chief executive of the regulatory body, Mr. Dhanesswurnath Thakoor, commented:

“As part of our core strategy, the FSC is aiming at positioning Mauritius as a regional hub of sound repute in the field of Fintech.”

He added that the publishing of the framework was a stepping stone in building an open and transparent regulatory regime for fintech on the island nation.

The new guidelines will enable the off-shore African nation to attract companies that want to legally issue token offerings for security tokens.

The guidelines stated that any licensed security token trading platform needs to maintain a minimum of 35 million Mauritian rupees [around $AUD1.25 million] as fiat reserve.

Additionally, they also need to partner with crypto assets and traditional custodians for the safekeeping of their assets.

Regulatory consultant to the FSC, Loretta Joseph, added;

“This regulatory framework reiterates the stance taken over the last year to be a forward thinking and innovative nation that can lead appropriate and sensible regulation for the region,”

As with most regulation, the guidelines also highlighted that license holders need to follow strict money laundering (AML) and countering the finance of terrorism (CFT) requirements.

Featured image courtesy of Negative Space/Pexels

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