SECURITY TOKEN

OFFERING (STO)

SECURITY TOKEN SECURITY TOKENS

OFFERING (STO) • Any token whose benefit relies on a financial instrument or on
the profits of a business venture
• DLT compatible financial instrument
• Fall outside the remit of the Virtual Financial Assets Act
• Regulated by EU legislation and domestic law governing
Financial Instrument Test public offerings and capital issues by public companies

KEY REQUIREMENTS
Drafting of Prospects &
• The Issuer must determine the classification of the token by
Supporting Documentation undertaking a Financial Instrument Test (FIT)

• The FIT must determine that the token being offered to the
Submission of Prospectus with the public is a security under MiFID
Registry of Companies
• The legal instrument for the public offering of a security
token must be prepared in line with the Prospectus Directive
(2001/34/EC) and any other applicable laws in Malta, which
inter alia must fulfil the following requirements:
STO Launch (a) It is drafted in a clear and comprehensible manner
and addresses all the necessary criteria indicated
under the Second Schedule of the Malta Companies
Act, enabling the investors to make an informed
assessment with respect to the security token;
Ongoing Requirements (b) Sound governance structure;
(c) Includes a declaration form an expert (including
engineers, valuers and accountants) consenting to the
issuance of the prospectus; and
(d) It is submitted for approval and registration with
the Malta Registry of Companies.

• A prospectus is valid for 12 months after its approval by the

Malta Registry of Companies.

For more information on how ARQ Group can help your blockchain project and ICO please contact JP Fabri on
jpfabri@arqgroup.com or cryptoadvisory@arqgroup.com. ARQ Group offers a number of complementary services
including corporate structures, tax advice, residency & citizenship, compliance, legal service and accounting.

Disclaimer: The notes outlined in this Fact Sheet are for information purposes only and do not constitute any legal or regulatory advice. The information
contained herein is not to be construed in any way of form as legal advice and if you intend to carry out any of the activities contained herein, it is
advisable that legal advice is sought. The laws, regulations and rules issued by the MFSA surrounding the Virtual Financial Assets regulatory framework,
have recently become effective therefore they may still be subject to amendments and change in interpretation in the very near future.