The Mauritius Financial Services Commission (FSC) has issued a second guidance note concerning security token offering (STO) regulation, dated April 8.

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.

Lastly, the regulator notes that it “remains highly supportive of Fintech-related initiatives in Mauritius.”

The document follows a first guidance note from the regulator, issued in September 2018, on cryptocurrency as an asset class.

As Cointelegraph reported at the time, the Mauritius FSC also established a regulatory framework for digital asset custodian services in February.

Last month, Hong Kong's securities regulator, the Securities and Futures Commission, also issued official guidance on STOs.