You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 23, 2013

Licensing Exemptions for Foreign Securities Firms

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

The Stock Exchange of Thailand has taken many steps in recent years towards gradual liberalisation of the country’s capital market. For example, more foreign products are now permitted to be offered to Thai investors. This includes qualifying foreign exchange-traded funds, qualifying Asean Collective Investment Scheme and foreign-listed stocks with the intention of secondary listings on the SET. Exchange-control rules have also been relaxed, allowing Thai investors—both institutions and high net worth individuals—to invest in foreign capital markets.  

As a result, Thai mutual funds managed by private firms or government authorities have increasingly invested offshore, leading to numerous foreign mutual fund managers, investment banking and private equity firms focusing on Thailand as a new emerging market. Many of these entities have sought advice on the legal guidelines for approaching their prospective Thai investors.

There are several different regulated securities businesses. The licences to conduct those businesses currently are granted solely to banks and financial institutions and local securities companies, which are subject to heavy controls and compliance regulations.

Foreign securities firms generally are not permitted to conduct any securities businesses except as specifically exempted by Thailand’s Securities and Exchange Commission (SEC). For example, qualifying foreign securities firms wishing to offer services, not products, to Thai investors can enjoy exemptions for two securities businesses.

One is a discretionary investment management service or what is officially called a “private fund management service”, defined as “the management of funds of a person or group of persons who has authorised the management of investment to acquire benefit from securities, whether or not investment in other assets is also made, which management is conducted as an ordinary course of business, in consideration of a fee or other remuneration”.

According to SEC Notification Kor. Nor. 43/2549, qualifying foreign securities firms are automatically granted a general exemption to conduct this service without possessing a licence, if the following criteria are met:

  • The foreign securities firm has been licensed to conduct a securities business by a foreign regulator, which is an ordinary member of the International Organization of Securities Commissions (Iosco);
  • The foreign securities firm solicits and provides fund management services exclusively to any of the prescribed “institutional investors” in Thailand such as the GovernmentPension Fund, the Social Security Fund, insurance companies, commercial banks and securities companies, whether for their own accounts or the accounts of their institutional customers.

To qualify for the exemption, solicitations should be made only to institutional investors as defined in the notification.

Another type of securities business for which exemptions are available is investment advisory service, which means “giving advice in the normal course of business to the public whether directly or indirectly concerning the value of securities or the suitability of investing in those securities or the purchase or sale of any securities in consideration of a fee or other remuneration …”

This service is subject to SEC Notification No. Kor. Nor. 22/2544. It gives an exemption to qualifying foreign securities firms to give investment advice to Thai investors, without being licensed in Thailand, if the following criteria are met:

  • The foreign securities firm has been licensed to operate a securities business by a foreign regulator, which is an ordinary member of Iosco; and
  • The giving of advice is conducted in the following manner:

(a) In case of retail investors, the advice shall be conducted through Thai securities companies with proper licences;

(b) In case of institutional investors (same as above), the advice is specifically intended for institutional investors—a document showing the worst-case scenario of the investment in structured notes must be provided.

This essentially means qualifying foreign securities firms are free to solicit and be engaged by any Thai institutional investor to give advice on investments, provided the applicable regulatory requirements are met.

When conducting a securities business under the above exemptions, foreign securities firms should still observe conditions and restrictions imposed by other laws. For instance, the services should be provided on a cross-border basis. Otherwise, the foreign securities firm could be deemed to be “doing business in Thailand”, which would require a foreign business licence (FBL) under the Foreign Business Act.

Although it is probable an FBL could be obtained, the general post-FBL conditions such as establishing a physical branch office and bringing into Thailand an operating fund of at least 3 million baht could be an excessive burden.

Furthermore, representatives of the foreign securities firms sent to Thailand to conduct any business activities would require proper business visas from a Thai embassy or consulate and then work permits from the Employment Department.

Finally, any foreign securities firm wishing to open a representative office in Thailand for the purpose of being a contact point for its Thai investors can formally apply for a licence with the SEC, the process for which should be merely procedural.

Download Full Article
Related Professionals

Practices

Banking and Finance

Location

RELATED INSIGHTS​ 

August 27, 2026
The Bank of Thailand (BOT) is seeking public feedback on a proposed overhaul of the regulatory framework for licensed money changers authorized by the finance minister, under the Exchange Control Act, to buy and sell foreign banknotes separately from commercial banks and specialized financial institutions. The BOT published the draft principles on August 19, 2026, for public consultation, with comments accepted through September 18, 2026. If adopted in its current form, the new framework would substantially raise licensing standards, require existing licensees to undergo a review and upgrade process, temporarily freeze new applications in 2027, and reduce application intake rounds from 2028 onward, with significant implications for both existing operators and prospective new entrants. The overhaul initiative stems from the BOT’s recognition of a need to prevent the use of licensed money changers as channels for financial crime. The stated objectives are to build public confidence, ensure the safety of financial service users, and align the supervisory framework with the current risk profile of the business and evolving market conditions. Upgraded Licensing Standards The BOT intends to significantly revise the licensing framework, including requirements relating to registered capital, branch management, operational standards, and customer transaction limits. Detailed criteria have not yet been released and are expected to be subject to further consultation. All existing licensees will be required to upgrade to meet the new standards and submit evidence of compliance for BOT review on a case-by-case basis. Existing licensees that are unable to satisfy the upgraded requirements may face regulatory consequences, subject to the final framework and BOT review process. Freeze and Reopening The BOT will temporarily stop accepting new license applications throughout 2027 to focus resources on inspecting and upgrading existing money changers. Any party wishing to obtain a new money changer license must submit its application by
Read More
August 20, 2026
As part of its membership in Lex Mundi, Tilleke & Gibbins has released the latest edition of its Guide to Doing Business in Thailand, providing an overview of the legal, regulatory, and commercial considerations for companies establishing or expanding operations in Thailand. The 2026 edition offers practical insight into the country’s business environment, investment framework, and operational requirements. The guide covers a wide range of topics relevant to foreign and domestic investors, including: Investment incentives and promotion schemes Financial facilities and banking regulations Exchange controls and money transfers Import and export regulations Business structures and incorporation options Requirements for establishing a business Operational and compliance considerations Business cessation and insolvency procedures Employment and labor laws Taxation Immigration and visa requirements Prepared by Tilleke & Gibbins lawyers across multiple practice areas, the publication outlines key aspects of doing business in Thailand, including foreign investment restrictions, regulatory compliance obligations, corporate structures, employment requirements, and recent legal and economic developments affecting investors. The publication forms part of Lex Mundi’s Country Guides series, a global collection of jurisdiction-specific reference materials prepared by member firms around the world. Together, these guides help companies evaluate opportunities, compare regulatory environments, and plan international business activities across multiple markets. The full Guide to Doing Business in Thailand 2026 is available through the button below.
Read More
August 18, 2026
The Bank of Thailand (BOT) is seeking public comment on proposed amendments that would significantly expand know-your-customer (KYC) and customer due diligence (CDD) requirements for cash-related transactions at financial institutions (FIs) and specialized financial institutions (SFIs). Released on August 5, 2026, the proposed regulation would supersede BOT Notification No. 16/2569, which focused primarily on cash withdrawal transactions. The public comment period is open through September 3, 2026. The amendments reflect concerns that FIs and SFIs may be used to facilitate the movement, concealment, and conversion of criminal proceeds, potentially damaging institutional operations and public confidence in the financial system. Expanded Scope of Covered Transactions The most significant change is the broadening of the definition of “cash-related transactions.” Previously, the regulation covered only cash withdrawals and uncrossed check withdrawals. The amended regulation extends coverage to include: Cash deposits, check deposits, or receipt of funds from the public not in the form of deposit accounts; Thai baht (THB) banknote exchange (different denominations); Receipt of cash for issuing checks and drafts; and Purchase, sale, or exchange of foreign banknotes. Mandatory Identity Verification and Risk Management For all cash-related transactions, FIs and SFIs must require customers, or authorized or delegated persons, to present identification or verify their identity before every transaction, including one-time (walk-in) transactions. Specific identification requirements vary by transaction type, customer nationality, and channel (branch vs. electronic). FIs and SFIs must also establish comprehensive risk management processes and procedures for cash-related transactions. These requirements include identifying customers or authorized representatives in accordance with transaction-specific verification standards, analyzing customer behavior, implementing risk-management measures proportionate to the customer’s risk profile, and recording abnormal behavior in relevant systems. The BOT also encourages institutions to proactively guide customers toward transaction channels that offer greater traceability than cash. For corporate customers in high-risk business sectors—including foreign
Read More
August 11, 2026
On July 27, 2026, the State Bank of Vietnam (SBV) released a draft decree proposing amendments to Decree No. 52/2024/ND-CP dated May 15, 2024, on non-cash payments (Decree 52). The draft decree would amend 17 of Decree 52’s 38 articles, with several key changes directly affecting providers of intermediary payment service (IPS). The key proposed changes affecting IPS providers are outlined below. Streamlining IPS Licensing Procedures A central objective of the draft decree is to simplify regulatory procedures for IPS providers. Notably, it would significantly reduce IPS licensing documentation requirements by removing the need to submit enterprise registration certificates, investment registration certificates, and documents evidencing the qualifications of the legal representative and general director. Instead, the SBV would retrieve this information directly from national business registration and other specialized databases, requesting additional documents only where the relevant information cannot be verified electronically or is incomplete. The draft decree also removes the current limit of two rounds for dossier supplementation and shortens processing timelines for several IPS licensing procedures such as issuance, amendment, and reissuance of IPS licenses. The processing time for new IPS license applications would be thereby reduced from 90 to 60 working days. In addition, several continuing IPS business conditions would be removed. For example, IPS providers would no longer be required to maintain certain representations relating to corporate restructuring or the legality of contributed capital. Likewise, the IPS project plan (đề án) would become a one-time application document rather than an ongoing licensing condition. If retained in the final decree, this change could provide IPS providers with significantly greater flexibility to implement post-licensing technology upgrades, system integrations, and corporate restructuring transactions without needing to revisit the originally approved project plan. The draft decree also removes the requirement for the SBV to consult the Ministry of Public
Read More