Regulatory Alerts2025-01-01
Circular No. 3 of 2025: Contract for Differences with Virtual Asset as an Underlying Asset
The Financial Services Authority (FSA) issues Circular No. 3 of 2025 to clarify that Contract for Differences (CFDs) with Virtual Assets (VAs) as underlying assets are permissible under the Securities Act, 2007, and do not constitute virtual asset services under the Virtual Asset Services Providers Act, 2024. The FSA determined that CFDs on VAs do not involve actual VA ownership or blockchain transactions, distinguishing them from virtual asset services, even though 56% of Seychelles' Securities Dealers currently offer such products. Licensees offering these CFDs must maintain rigorous standards, conduct thorough client suitability assessments, provide comprehensive risk disclosures, implement robust entry controls, and avoid actively marketing to retail clients, ensuring they can demonstrate client suitability if disputes arise.