How to distribute tokenized securities in Central & Latin America?

One of the important steps in issuing a security token is being aware of the rules and regulations that apply in each jurisdiction the issuance will take place in.

Many factors go into choosing the jurisdiction including how the country handles compliance and regulations. Of course, you will want to use a jurisdiction with fair and not unduly burdensome regulations but also one that has very clear and well established laws. Having clear and well established laws can make it easier to find good legal counsel that can assist in your offering and can also offer more assurances for the potential investors.

Because security tokens are a regulated financial product, most countries will have established regulatory bodies and rules to govern the transactions. Some of the main countries in Latin America that will be used for Security Token Offerings and their governing bodies are listed below.

Brazil:

Your Security Token can be sold to both Professional Investors and Qualified Investors without further regulation or publication requirements. Professional Investors are individuals who hold investment assets in excess of R$10M (around 2.5m USD) and Qualified Investors which are individuals who work in the financial markets and also hold investment assets in excess of R$1M. Investment funds and other financial corporations can also purchase your Security Tokens without registrations.

Mexico:

Mexico also has clear laws that allow you to issue your Security Token to certain investors without needing to comply with strict investment regulations. Your Token can be sold to Basic Qualified Investors, which is anyone who makes over $130,000 net income over the previous two years, or holds assets in excess of $415,000. Your Token can also be sold to Sophisticated Investors who have a net income $270,000 or holds assets in excess of $830,000. Sophisticated Investors are permitted to invest at a larger threshold than Basic Qualified Investors.