In the document, the FSC declared that security tokens are considered digitally represented securities as defined in the Securities Act of 2005. As a consequence, when STOs are conducted in or from Mauritius, the offering is regulated by local security regulations, including the requirement for a prospectus.
The regulator also notes that, while no STO can take place without its prior approval, there are exceptions for when a token issuer needs authorization. Those exceptions include offerings meant for sophisticated investors, expert investors, expert funds, professional collective investment schemes and specialized collective investment schemes.
The FSC also highlights that carrying out financial services without a license is a criminal offense and warns investors of the high-risk nature of STOs. The document states that investments in STOs are not protected by any statutory compensation arrangement in the country.