Thailand’s Securities and Exchange Commission (SEC) has urged stakeholders to prepare for the amended Securities and Exchange Act 2019, which is expected to help open the Kingdom’s capital market to new players and introduce digital trade through the use of blockchain technology.
Major changes to the Act, effective since April 17th, include expanding the coverage scope for scripless transactions to encompass primary markets for all types of securities.
In an exclusive interview with the Bangkok Post, SEC Deputy Secretary-General Tipsuda Thavarama said scripless coverage previously only applied to the secondary market, adding that the change will have a major impact because the amended Act provides a legal basis to support the capital market’s tokenization platform.
According to the amended Act, tokenized securities depository platforms and the issuance of digital shares in the primary market are both possible, while the legal framework enables a digital fundraising instrument known as security token offerings (STOs), which are blockchain-driven financial securities that offer investors certain rights to the company.
As of May 14, 2018, companies or startups looking to raise funds by issuing utilities tokens or investment tokens have been able to do so through tokenization under the digital asset royal decree, which encompasses all aspects of virtual trade.
Under the royal decree on digital assets, the four types of secondary business intermediaries are digital exchanges, brokerage firms, dealers and token portal service providers, otherwise known as initial coin offering (ICO) portals.
According to the SEC, tokens issued under the Thai regulatory framework can fall under either the Securities and Exchange Act or the digital asset royal decree, depending on their substance and relevant rights given.
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