Application Review Requirements and Expectations for Transitional Virtual Asset Service Providers

Circular No 14 of 2025
Date: 19th November 2025
Application Review Requirements and Expectations for Transitional Virtual Asset Service Providers With the commencement of the Virtual Asset Service Providers Act, 2024 (VASP Act) and the ongoing processing of applications submitted under the transitional provisions, the Financial Services Authority (the Authority) is issuing this circular to inform all applicants and their professional advisors of the Authority’s expectations during the full application review phase. The Authority has completed the initial triage of applications and formally commenced detailed assessment, including interviews with key personnel, review of governance structures, and evaluation of compliance capabilities under the VASP Act and the Anti-Money Laundering and Countering the Financing of Terrorism Act, 2020 (AML/CFT Act). Expectations of Applicants Applicants are reminded that:

1. Submissions must present a complete and accurate picture of existing processes,
   procedures, compliance and governance structures.
2. These requirements are not aspirational but must already be in operation as applicants
   are covered by transitional provisions pursuant to section 42 of the VASP Actand obligations under the AML/CFT Act. Transitional provisions do not exempt applicants from compliance with the AML/CFT Act and other applicable legislation. Issues Identified by the Authority The Authority has identified several recurring deficiencies in applications submitted to date:
3. Widespread use of ‘placeholder’ submissions: generic, cut-and-paste, AI-generated or
   group policies with no localization or reflection of governance realities.
4. Weaknesses in the calibre, knowledge and independence of key nominated personnel
   and directors.
5. Inadequate demonstration of ‘substance’ as required under the VASP Act, including
   insufficient local governance, unclear decision-making authority, or absence of resident senior management or commitment to effect same.

Required Action by Applicants
To avoid delays or negative outcomes, applicants who have passed triage are strongly advised to:

1. Conduct an immediate review of the quality and accuracy of their submissions.
2. Where deficiencies are identified, applicants should urgently file revised policies,
   procedures, governance documents or new nominations of key persons.
3. Ensure nominations of key persons reflect genuine capacity, expertise and independence.
4. Provide evidence-based submissions demonstrating operational readiness, including
   governance arrangements, local control, outsourcing oversight and data accessibility.
5. The Authority emphasizes that it will not provide “handholding” during this process.
   Applicants and advisors are expected to meet the legal and regulatory requirements independently. Consequences of Non-Compliance or Inaction Applications that remain incomplete, inaccurate or unsupported by verifiable documentation risk:
6. Subject to a request for information (where omissions identified are not such that would
   render the application impossible to review).
7. Rejection or refusal of the application.
8. Being moved to the bottom of the processing queue, resulting in significant delays.
   The Authority will assess applications rigorously in line with the VASP Act, AML/CFT Act and the international standards (particularly the Financial Action Task Force (FATF) Standard). The Authority reiterates its commitment to ensuring the development of a compliant, credible and substance-based virtual asset services sector in Seychelles. All applicants and advisors are strongly encouraged to take this review process seriously and to take urgent corrective action where necessary to avoid delays or negative outcomes. FINANCIAL SERVICES AUTHORITY