Thai government gives green light to Electronic Securities Bill, aiming to establish a digital economy in the securities sector.
The raging wave of technological advancement has struck yet another field - finance. On June 10, 2023, the Thai Cabinet approved the draft Electronic Securities Bill, a groundbreaking move aimed at modernizing the country's financial infrastructure and encouraging the use of technology for more efficient and accessible financial transactions.
Pornanong Busaratrakul, the Secretary-General of the Securities and Exchange Commission (SEC), announced that this bill will serve as a cornerstone for Thailand's capital market's entrance into the digital era. The new legislation will simplify the trading of securities, from equities and investment units to debt instruments, making it a breeze for retail investors to buy and trade assets. It will also improve investor protection by streamlining the entire securities trading process, replacing the old script-based system and paper certificates with an electronic format.
The SEC will implement secondary regulations, enabling the issuance of electronic securities in place of traditional paper certificates. This digital transformation is expected to be in effect by 2025, after Parliament's approval.
In a related development, the Cabinet also approved the issuance of G-token bonds. The Public Debt Management Office (PDMO) will be responsible for issuing these tokens in a digital asset format, enhancing investment flexibility and streamlining the asset transfer process for investors.
To further support the change, the SEC is collaborating with relevant agencies to set transaction standards and construct infrastructure for the digital capital markets, ensuring seamless transactions from the issuance and sale of securities to transfers and collateral management. This initiative reflects the SEC's belief in the potential of innovation and technology to boost Thailand's capital markets, enhancing efficiency and fostering competition and innovation in the financial sector.
The Thai government also recently approved principles for four draft bills, including the Securities and Exchange Act (Amendment No. ...) B.E. ... and the Amendment to the Digital Asset Business Act B.E. 2561. These bills are centered on incorporating appropriate technologies for capital market transactions, enhancing regulatory clarity, and improving the effectiveness of legal enforcement.
Pornchai Thirraveja, Director of the Fiscal Policy Office and spokesperson for the Finance Ministry, underlined the draft Securities and Exchange Act's goal of promoting technology-based product development and transactions in the capital market, thereby encouraging public investment and boosting competitiveness.
The digital asset market, particularly the G-Token, is expected to be a game-changer for Thailand's digital finance sector. With its launch scheduled for August 2025, the G-Token will bring flexibility and convenience to transactions. This year, Thailand is also set to unveil the "Digital Baht," another significant step forward in digital finance.
Although there are concerns about the potential limitations posed by strict regulations, the digital finance sector views these regulations as a strength. Clear guidelines will foster a more favorable environment for business and investment in Thailand. There is also hope for positive news regarding cryptocurrency taxation, with the possibility of exempting profits from crypto transactions from tax, similar to how stocks listed on the Stock Exchange of Thailand (SET) are treated.
As Bitkub, Thailand's leading digital asset platform, continues to grow, with approximately 5 million registered users and an average daily trading volume of around 2 billion baht on regular days, it is poised to lead Thailand's foray into the digital financial landscape.
[1] "Thailand aligning digital securities oversight with international standards", Global Legal Chronicle, April 28, 2023.[2] "SEC opens public consultation on proposed regulations for G-Tokens", Business Insider, May 18, 2023.[3] "Thailand to leverage financial technology for government finance", Finews.asia, June 1, 2023.[4] "G-Token: A game-changer for Thailand's digital finance sector", The Bangkok Post, June 3, 2023.[5] "Thailand's SEC proposes amendments to investment regulations to stimulate the capital market", The Nation, May 20, 2023.
- The Electronic Securities Bill, a significant step in technological advancement, will facilitate business in Thailand's capital market by streamlining securities trading and enhancing investor protection.
- The Thai government's approval of the G-token bonds and the "Digital Baht" is a testament to their commitment to international standards in digital finance, encouraging business and investment.
- Infrastructure for digital capital markets is being constructed by the SEC in collaboration with relevant agencies, aiming to foster competition and innovation in Thailand's finance sector through technology.
- The Thai SEC's proposed amendments to investment regulations aim to incorporate appropriate technology for capital market transactions, following international standards and stimulating business growth.
