On June 23, 2022, Thailand’s Securities and Exchange Commission (SEC) opened a public hearing period on regulatory controls for initial coin offering (ICO) portals that serve as financial advisors to digital token issuers. The proposed measures aim to prevent conflicts of interest; allow ICO portals to outsource certain functions; and establish additional notification obligations for ICO portals. The public hearing is open for general comments until July 23, 2022, and the new legislation is expected to be issued soon after that. During the public hearing period, any interested parties can comment on the SEC’s proposed principles. The key proposed points are outlined below. Conflicts of Interest Similar to SEC-approved financial advisors for securities offerings, ICO portals must be clear of conflicts of interest when representing issuers in a coin offering. According to the draft regulation, the following conflicts of interest are prohibited: The ICO portal (and certain individuals as specified by the SEC) directly or indirectly holds a prohibited amount of shares in the issuer, its affiliates, or its subsidiaries. If the issuer is not a listed company, any shareholding or portion thereof is prohibited. If the issuer is a listed company on the Stock Exchange of Thailand (SET), the shares held by the ICO platform may not total more than five percent of the total voting rights. The issuer (and certain individuals as specified by the SEC) directly or indirectly holds shares in the ICO portal in any amount if the ICO portal is not a listed company, or totaling more than five percent of the voting rights if the ICO portal is listed on the SET. Any of the ICO portal’s directors or executives, or the head of the department responsible for screening the ICO project, is also a director in the issuer. The ICO portal has

On July 15, 2022, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/754 instructing banks with authorized dealer (AD) status to inform the CBM of the balances in foreign-currency accounts belonging to Myanmar companies with up to 35% foreign ownership. This was to be done by 6 p.m. on the same day. In addition, AD banks were ordered to purchase the balances of the relevant foreign-currency accounts and exchange the amounts with Myanmar kyat (MMK). These amounts are to be entered into the bank-customer (bid) and non-trade inward (real time-R) lists by 6 p.m. on July 18, 2022. The letter also warned that the failure to follow this instruction would be subject to various sanctions, including warnings, restriction of foreign exchange management functions, fines, temporary or permanent suspension of banking authorizations, and cancellation of business licenses. Letter No. FE-1/754 followed a decision made by the Foreign Exchange Supervisory Committee in meeting No. 32/2002 requiring foreign-currency balances held in accounts of Myanmar companies with up to 35% foreign ownership to be converted into MMK. A list of these companies, provided by the Foreign Exchange Supervisory Committee, was included with the letter. For more details on these foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].

On July 13, 2022, the Central Bank of Myanmar (CBM) revoked its previous exemption from the foreign currency conversion requirement for companies that are registered with the Directorate of Investment and Company Administration (DICA) and have at least 10% foreign investment. Banks with authorized dealer  status are thus no longer permitted to exempt these companies from the CBM’s requirement to convert foreign currency transfers and balances to Myanmar kyat. This sudden revocation of the prior relaxation was circulated in CBM Letter No. FE-1/739 to AD banks for exchanging foreign currencies in Myanmar. The letter effectively reverses information the CBM circulated in meeting minutes on June 7. Notably, however, this does not affect foreign-owned companies approved by the Myanmar Investment Commission, or investments in special economic zones. These exemptions and others previously announced by the CBM in relation to the currency conversion requirement remain valid, and are not affected by this revocation. For more details on these foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].

On May 30, 2022, Thailand’s Securities and Exchange Commission (SEC) announced that it would start regulating ready-to-use utility tokens, a type of digital token that had previously been exempted from the SEC’s approval and regulatory control. A public forum was open for comments from various stakeholders until June 29, 2022, and the draft regulation is expected to be issued soon. So far, the SEC has only supervised the issuance of not-ready-to-use utility tokens—digital tokens with the underlying right to acquire specific goods or services, which cannot be utilized upon issuance but at a later date. Due to the growing digital asset industry and lack of regulatory control, ready-to-use utility tokens have become more popular and many are listed for trading in digital asset exchanges. The SEC claimed that it is now necessary to regulate ready-to-use utility tokens as some issuers appeared to be exploiting the regulatory loophole to manipulate the price and supply of these tokens in both the primary and secondary markets, while providing insufficient data disclosure to investors. The SEC’s proposed principles include the following key points: Pre-Approval Requirements The same pre-approval requirement applicable to not-ready-to-use utility tokens will apply to ready-to-use utility tokens which an issuer intends to list on a digital asset exchange. This means that the issuer must proceed with the standard formalities, i.e., obtaining prior approval from the SEC, filing a draft prospectus, and offering the approved tokens via a SEC-approved ICO portal operator only. The SEC offers a fast-track (15 days) approval for qualifying ready-to-use utility tokens, which are those with plain-vanilla characteristics; with an offering price corresponding to the value of the underlying goods/services; for which the supply of goods and services does not vary with the price of the tokens (i.e., fixed coins); and which are not intended to be