On 15 pages the island state published guidelines enabling the FSC to register and regulate security token trading systems
The Financial Services Commission (FSC), the integrated regulator for Mauritius’s non-banking financial services sector, has announced a legal framework designed to provide greater regulatory certainty for security token systems in the country. The regulator said the measure will enable the implementation of a common licensing standard for security token trading systems in Mauritius. On Monday the FSC published a 15-page document setting out the new standards and the accompanying press release.
Under the new guidance issued pursuant to Section 7(1)(a) of the Financial Services Act 2007, new trading systems for security tokens may now obtain an FSC licence. This framework allows a business not only to offer a security token for sale but also to operate trading venues on the island. The move is being regarded as a significant milestone in the formal recognition of security tokens.
The guidelines also impose strict requirements on licence holders. Licensees must comply with laws and codes to combat money laundering and terrorist financing (AML/CFT). This includes adherence to applicable data protection laws and the implementation of established market practices to ensure “efficient, transparent and integrated conduct in the financial market,” as stated by the FSC in its press release. Licence holders are also required to publish daily trading data for review by the Commission.
Additionally, the guidance requires that licensed security token trading organisations maintain a minimum capital of 35 million Mauritian rupees (approximately USD 880,000). They must appoint a registered custodian bank for digital assets, and fiat currency custody must be held with a licensed bank in Mauritius.
Commenting on the publication, FSC Chairman Dhanesswurnath Thakoor said: “As part of our core strategy, the FSC seeks to position Mauritius as a reputable regional hub for fintech.”
He added: “Publishing guidance on offering security tokens (STOs) and on security token trading systems is another important step in building an open and transparent fintech regulatory regime in Mauritius. We are already seeing growing interest in these specific licences and expect an increase in applications in the coming months.”
An FSC spokesperson indicated that further provisions regarding STO exchanges would be published later in 2020. The spokesperson added that the new licensing framework would enable Mauritius to become a crypto-friendly jurisdiction and a regional hub for security tokens—not only for neighbouring countries but also for Africa and India.