The Seychelles Financial Services Authority issued a Code of Corporate Governance in May 2025 that took effect on January 1, 2026, applying to all Securities Act licensees with limited exclusions. The Code is a binding instrument: under Section 33(5) of the FSA Act, failure to comply constitutes an offence. It operates on what the FSA calls an "apply or explain" basis — a recognition that smaller and simpler firms may need flexibility but that any deviation from the Code's specific provisions must be documented and justified to the regulator. Exness (SC) Ltd, license SD025, sits squarely within the Code's scope. So do approximately 190 other Securities Dealers operating under the FSA Seychelles framework as of early 2026, including the Seychelles-licensed entities of several other major retail forex brokers.
The Code is the most significant change to the Seychelles regulatory environment in roughly five years. It also sits in tension with how most retail comparison content frames the Seychelles licence: as a permissive offshore framework with limited substantive supervision. That framing was always partial, and is increasingly inaccurate. This piece walks through what the Code requires, what the "apply or explain" mechanism actually means in practice, and how the new Seychelles posture compares with the parallel offshore frameworks that XM uses.
What the Code Actually Requires
The Code addresses corporate governance in the conventional financial-services sense: board composition, board responsibilities, internal control frameworks, risk management, audit and compliance functions, transparency in operations, and the relationship between the licensed entity and any group affiliates. The text reflects, in broad terms, the consensus practice in international financial services regulation — what the OECD's Principles of Corporate Governance have been advocating for years, with adaptations for the Seychelles context.
The substantive provisions cluster around five themes.
Board composition and independence. The licensee must maintain a board with sufficient independent representation. Where the licensee is part of a group, the Seychelles entity's board cannot be wholly composed of group affiliates. There is a minimum threshold of independent non-executive directors that varies with the size and complexity of the licensee.
Internal control and risk management. The licensee must operate documented internal control frameworks proportionate to its scale. Risk management policies must address market risk, credit risk, operational risk, and conduct risk. The risk management function must have sufficient independence from operational management.
Compliance and audit. A compliance function must be established with sufficient independence and resources. Internal audit, where required by scale, must report to a board-level audit committee.
Conflicts of interest. Documented policies for managing conflicts at the firm level and at the level of senior personnel, with disclosure to the regulator and to clients where applicable.
Transparency and reporting. Specific reporting obligations to the FSA on a defined cadence, with transparency provisions covering significant business decisions and changes in control.
The Code does not directly address retail consumer protection in the way ESMA's product intervention measures do — it does not cap leverage, prohibit bonuses, or mandate negative balance protection. It addresses the upstream question of whether the licensee is well-governed enough to operate the business in the first place.
Why Section 33(5) Matters
The Code's binding nature comes from Section 33(5) of the FSA Act, which makes non-compliance an offence. This is a meaningful escalation from a pure "best practice" framework, where deviations would be grounds for regulatory engagement rather than enforcement.
The "apply or explain" mechanism is what gives the Code its operational character. A licensee that does not literally apply a specific provision must document why — typically by reference to scale, complexity, or specific business circumstances — and disclose the explanation to the FSA. The mechanism is borrowed from comparable frameworks in other jurisdictions including the UK Corporate Governance Code and similar South African and Mauritian frameworks.
In practice, the mechanism creates a documented dialogue between the licensee and the FSA about governance choices. The dialogue is not public, but it forms part of the regulator's supervisory file. Over time, the file accumulates evidence of how the licensee has explained its governance choices, which the regulator can use to inform escalation decisions if compliance issues arise.
For Exness (SC) Ltd specifically, the Code requires that the entity's board and governance structure satisfy the Code's provisions or that the entity provide documented explanations for any deviations. The entity has been part of the broader Exness group structure for several years; the Code's effect is to require formal demonstration that the Seychelles entity is governed at the entity level — not merely as a wholly-controlled affiliate of the group — or to formally explain why entity-level governance is structured differently.
How This Compares With XM's Parallel Offshore Frameworks
XM operates several offshore entities. Its IFSC Belize entity sits under the Belize International Financial Services Commission framework, which does not have a directly comparable corporate governance code. Its FSCA South Africa entity sits under the South African framework, which has corporate governance provisions but not in a single Code instrument with the binding character of Seychelles' Section 33(5). Its CMA Kenya entity sits under the Kenyan framework with its own provisions.
The asymmetry in 2026 is that the Seychelles entity of Exness now operates under a more prescriptive corporate governance framework than several of XM's offshore entities. This is a recent development — pre-2026, the Seychelles framework was in many respects lighter than the South African or DFSA frameworks. The Code's effect is to bring Seychelles' supervisory expectations closer to international standards while retaining the operational flexibility (high leverage, bonus availability, broad client jurisdiction acceptance) that has made the Seychelles licence commercially attractive.
For a retail trader choosing between Exness's Seychelles entity and XM's Belize entity in 2026, the Seychelles framework now represents a more substantive corporate governance backstop. The practical consequence is modest in normal operations — both brokers run their group-level governance well above either offshore standard — but it can become consequential during stress events, where the Seychelles framework now provides the regulator with a documented basis for engagement that the Belize framework does not.
The Practical Effect on Retail Clients
The Code's direct effect on a retail trader at Exness (SC) Ltd is largely indirect. The trader does not interact with the Code's provisions in day-to-day operations. The provisions affect:
The board-level accountability for major operational decisions, including decisions that affect retail product availability, pricing, and complaint handling.
The independence of the compliance function within the entity, which influences how complaints and disputes are escalated and resolved.
The risk management function's oversight of the entity's exposure to market risk, counterparty risk, and operational risk — which becomes consequential in stress events such as broker-side liquidity issues or technology failures.
The transparency of the entity's operations to the FSA, which influences the regulator's ability to engage during disputes or enforcement matters.
In normal operations, the trader will not notice any of this. In stress, the Code provides the regulator with a more structured basis for engagement than the pre-2026 framework offered.
What the Code Does Not Address
It is worth being explicit about the boundaries of the Code's substantive scope. The Code does not:
Cap leverage. Exness Seychelles entity continues to offer 1:2000 default leverage and the framework permits it.
Prohibit bonuses. Bonus availability is not addressed by the Code; it remains a marketing decision for the broker subject to other Seychelles consumer protection rules.
Mandate negative balance protection. NBP at Seychelles entities remains a contractual broker undertaking rather than a regulatory mandate.
Provide an investor compensation scheme. There is no Seychelles investor compensation fund equivalent to the ICF in Cyprus.
The Code is upstream of all of these — it addresses governance, not retail product rules. A trader concerned about leverage, bonus, NBP, or compensation scheme availability is not made better off in those specific dimensions by the Code's existence.
The Decision Reading
For an offshore-pathway retail trader comparing Exness (SC) Ltd and XM Belize in 2026, the Seychelles entity now sits under a corporate governance framework that is materially more developed than Belize's. The practical impact in normal operations is small. In stress events — broker-side issues, complaint escalations, regulatory engagement on operational matters — the Seychelles framework provides a more structured backstop.
For a trader choosing between Exness (SC) Ltd and Exness's CySEC entity, the Code does not change the comparative posture. The CySEC entity remains substantially more prescriptive in retail consumer protection (leverage cap, bonus prohibition, negative balance protection, investor compensation, MiFID II execution reporting, DORA ICT requirements). The Code closes some governance gaps at the Seychelles entity but does not close the consumer protection gap.
For a trader who is already Exness Seychelles client and is wondering whether the Code changes anything: in day-to-day terms, no. In dispute or stress scenarios, the regulatory framework now has more substance to engage with — which improves the trader's leverage marginally without changing the fundamental product or pricing.
Honest Limits
The Code's text is publicly available through the FSA Seychelles website and supporting commentary from financial services advisors specialising in Seychelles licensing. The "apply or explain" dialogue between specific licensees and the FSA is not public. This Desk has not reviewed Exness (SC) Ltd's specific governance disclosures, has not seen the entity's board composition relative to the Code's requirements, and has not had access to the FSA's supervisory file for the entity. The structural analysis above reflects the Code as written and how it should operate based on comparable frameworks elsewhere; the specific application at Exness (SC) Ltd will become observable only as supervisory engagement and any formal governance disclosures accumulate. The Code took effect on January 1, 2026, so the first full reporting cycle under the framework concludes in early 2027; before that, conclusions about practical impact are inherently provisional.