Thailand Ready to Have “Major Impact” with its Legal Support to Tokenization Platform: SEC Deputy-General
According to, the Securities and Exchange Commission (SEC) of Thailand is urging all stakeholders to prepare for the amended Securities and Exchange Act of 2019. This act should help the country’s capital market to get new participants and introduce digital trade using blockchain technology.
One of the significant changes to the Act that has been in effect since mid-April has been expanding the coverage of scope of the scripless transactions to cover all type of securities.
In an interview with the Bangkok Post, SEC deputy-general, Tipsuda Thavarama stated, “This change will have a major impact as the amended Act provides a legal basis to support [the country's capital market] the tokenization platform.”
She further shares that fundraising through securities issuance could also gear towards digitization at a fast pace in the future.
“The law also opens opportunities for additional market players and supports the idea of entirely digital shares. We have two challenges: preparing for the digitised world and facilitating new players and ideas in the capital market.”
Legal Support To Crypto Space
Earlier, the act only covered traditional securities transactions for stocks, bonds, and funds. Now, under the amended Act, a tokenized securities depository platform and issuance of digital shares in the primary market has been made possible. The legal framework also facilitates securities token offerings (STO).
Companies and startups that have been waiting to issue tokens since last year in May have been not able to raise funds through tokenization under the digital asset royal decree that covers all aspects of virtual trade.
Under the royal decree, four types of secondary business intermediaries are covered viz. crypto exchanges, brokerage firms, initial coin offerings (ICO) portals, and dealers.
While broker, dealers, and exchanges are required to apply for licenses from the Finance Ministry, ICO portals must be approved by the SEC. Out of the several fintech companies that applied for licenses to operate as crypto exchanges, three have been authorized.
Capital Markets To Prepare For A Digital Future
Tipsuda says the digital asset royal decree provides clarity for cryptos and digital asset class but the drawback comes in the form of technical overlapping characteristics.
“There will be two paths to walk: securities and digital assets,”
said Mrs. Tipsuda.
“[Issuers of] ICOs wanting to have real asset-backed collateral will have to contemplate whether they are REITs, ICOswith asset-backed collateral, or both. This will create complications.”
If a token is deemed securities as defined under the Securities and Exchange Act, it will be governed under the Act even if it is issued via a digital process and if a token is not deemed to have securities features, it will be governed by the digital asset royal decree.
“If I could turn back time or had an opportunity to present a new perspective, the digital asset royal decree should not overlap with the Securities and Exchange Act,”
said Mrs. Tipsuda.
According to her, traditional securities will also eventually adopt digital features as opposed to the current difference between traditional securities and digital assets.