The Securities (Amendment) Act, 2024 and related regulations, which came into force on 1 January 2025, introduced a number of changes affecting the operations and compliance obligations of Seychelles Securities Dealers. Existing licensees were granted an 18-month transition period to implement the new requirements, with compliance required by 30 June 2026.
As the transition period draws to a close, securities dealers should assess whether any additional measures are required to comply with the amended requirements. Some of the key changes are outlined below.
Enhanced Local Presence and Oversight
Licensed entities are required to maintain at least two resident fit and proper individuals in Seychelles who serve as directors, compliance officers or members of managerial staff.
Improved Client Classification and Investor Protection
The amended Conduct of Business Regulations introduced client classification requirements, requiring securities dealers to categorise clients as either retail or professional clients.
For certain leveraged and higher-risk products, securities dealers must conduct appropriateness assessments to determine whether a retail client possesses sufficient knowledge, experience and financial capacity to understand and absorb the associated risks.
The regulations also limit a retail client’s liability to the funds held in the client’s trading account.
Strengthened Complaint Handling Requirements
Licensed entities are required to appoint a resident individual responsible for complaints handling and establish internal procedures for managing complaints effectively. These procedures must be submitted to the Seychelles Financial Services Authority for approval before implementation.
The amended regulations also introduced specific requirements relating to the documentation of client complaints and the maintenance of a complaints database.
Clearer Risk Warnings for Investors
Securities dealers must include prominent risk warnings in their advertisements. These warnings must inform investors about potential losses, the risks associated with leveraged trading and the complexity of products such as CFDs, futures and options.
These warnings must be clearly displayed, including on websites and mobile applications.
Higher Capital Requirements
The reforms increased the minimum issued and paid-up capital requirement for securities dealers from US$50,000 to US$100,000. The capital must also be maintained in an approved bank account.
For further information on the amendments, please contact FiveComply.
Disclaimer
For information purposes only. This publication does not constitute legal, regulatory, financial or investment advice.
