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

June 18, 2024

Thailand Issues Notifications on Sustainability-Related Tokens

Subscribe to Updates

On June 1, 2024, Thailand’s Securities and Exchange Commission (SEC) issued four notifications amending existing regulations to recognize sustainability-related tokens and institute specific measures for regulating them. These tokens are intended to offer diverse sustainability-related products to ESG funds in Thailand and drive the growth of a sustainable digital economy in the country.

The key points in the notifications are summarized below.

Definitions

Under the notifications, sustainability-related tokens are classified into four types:

  • Green tokens: Digital tokens specifically intended to incentivize or fund projects that promote environmental sustainability.
  • Social tokens: Digital tokens specifically intended to support and fund initiatives that contribute to social welfare.
  • Sustainability tokens: Digital tokens intended to support projects that enhance both environmental and social welfare through funding and incentives.
  • Sustainability-linked tokens: Digital tokens intended to fund activities that promote sustainability. This includes tokens that have adjustable returns based on the performance of the issuing entity or its affiliates in meeting specified sustainability-related goals or outcomes.

The offering of sustainability-related tokens is subject to Thailand’s general requirements for token offerings: (1) approval from the SEC and (2) filing the registration statements and the draft prospectus with the SEC before marketing and offering the sustainability-related tokens to public investors in Thailand, unless exempted. The sustainability-related tokens must be offered through an SEC-approved ICO portal, which will assume a role similar to that of a financial adviser and an underwriter in a public offering of securities.

Sustainability-Related Token Offerings

In addition to complying with the general requirements for token offerings, sustainability-related token offerings must comply with the following measures:

  • Issuer disclosure: The issuer must disclose certain sustainability information, both before and after the offering, according to standards comparable to those of nationally or internationally recognized green, social, and sustainable bonds (GSSBs) and sustainability-linked bonds (SLBs)—such as the principles of the International Capital Market Association. This includes arranging for a qualified external independent reviewer to certify or provide an opinion on the sustainability of the project.
  • Disclosure on the ICO portal: The ICO portal must enter into an agreement with the issuer that obliges the issuer to disclose the information prescribed by the SEC to investors through the ICO portal’s platform, and to continue to disclose such information throughout the duration of the project.

Fee Exemption

From June 1, 2024, until May 31, 2028, issuers of sustainability-related tokens are exempt from paying the application fee, the fee for filing the sales offering statement, and the fee for filing the draft prospectus for sustainability-related tokens.

For more information on these sustainability-related token notifications, or on any aspect of digital assets and cryptocurrency in Thailand, please contact Kobkit Thienpreecha at [email protected], Pornpan Wichawut at [email protected], Napassorn Lertussavavivat at [email protected], or Rujaporn Paritsantik at [email protected].

Related Professionals

Industries

Fintech

Location

RELATED INSIGHTS​ 

March 12, 2024
Thailand’s Ministry of Finance has issued the Notification re: Criteria, Methods and Conditions for Applying for and Issuing Licenses to Operate Virtual Bank Business, which was published in the Government Gazette on March 4, 2024. This notification opens an opportunity for qualified experts in technology, digital services, and diverse data usage fields to apply for virtual bank licenses to provide financial services through new digital channels. The main goal is to serve the financial needs of target groups that may not have received sufficient or tailored financial services from the traditional banking system. Licensing Timeline Application submission period: 6 months (March 20–September 19, 2024). Announcement of successful applicants: Mid-2025 (approx. 9 months–1 year from the end of the submission period) After the announcement, successful licensees must demonstrate their readiness to commence virtual bank operations within 1 year (extendable for up to 1 additional year) via the following: Having paid-up registered capital of THB 5 billion and plans to increase the paid-up registered capital to at least THB 10 billion after the initial business period; Establishment or adjustment of a financial business group; Procurement of human resources, IT systems, and relevant risk management tools. Number of Licenses to be Issued No written or specified limit, subject to the discretion of the Bank of Thailand (BOT). Key Qualifications Applicants must have the following: Experience and resources to support virtual banking operations according to the business model and plan. Expertise and experience in conducting business that utilizes technology and provides services through digital channels. Experience demonstrating the ability to obtain, access, manage, and utilize data, including development of systems or data connections to facilitate user activities, allowing them to use their data to conduct transactions with other providers. Criteria In assessing applicants’ qualifications for a virtual bank license, the BOT will consider
Read More
January 30, 2024
Thailand has made its draft Platform Economy Act (the “Draft PEA”) available to relevant entities in certain industries. The Draft PEA aims to regulate and standardize digital platform service business operations and protect consumers and other stakeholders. Once the Draft PEA becomes law, the Royal Decree on the Operation of Digital Platform Service Businesses that are subject to Prior Notification B.E. 2565 (2022) and the relevant provisions under the Electronic Transactions Act B.E. 2544 (2001), as amended, will cease to have effect. The key provisions of the Draft PEA are summarized below. Definitions The definitions of the key terms under the Draft PEA are substantially similar to the definitions of the key terms under the royal decree mentioned above. According to the Draft PEA, “digital platform services” refers to the provision of electronic intermediary services that manage data to facilitate connection, through computer networks, between business users, consumers, or users, regardless of whether remuneration is charged. Exemption The Draft PEA does not apply to digital platform services (DPSs) that are regulated by specific laws and have rules guaranteeing transparency and fairness, or that follow operational standards no less stringent than those required in the Draft PEA. Nonetheless, the Electronic Transactions Development Agency (ETDA) can request or link data relating to exempted DPSs from the relevant supervisory authorities. Extraterritorial Effect Offshore DPSs with certain characteristics are also subject to the obligations under the Draft PEA and will have to appoint a coordinating person in Thailand. However, offshore DPSs will not have to establish a business in Thailand. General Responsibilities and Obligations The Draft PEA sets out the following requirements: DPSs with (1) at least THB 100 million (approx. USD 2.8 million) in annual revenue from providing the DPSs in Thailand before deducting expenses, or (2) more than 10,000 monthly users
Read More
January 23, 2024
The Bank of Thailand (BOT) has issued a new notification to sustainably address Thailand’s household debt problems by establishing responsible and fair lending requirements for lending service providers throughout their lending journey. Notification No. SorKorChor. 7/2566 Re: Provision of Responsible and Fair Lending was announced on December 21, 2023, and took effect on January 1, 2024. The lending service providers this notification applies to include both commercial banks and nonbank business operators (e.g., personal loan business operators, nano-financing business operators, and credit card business operators). The key principle of this notification is to provide criteria for responsible and fair lending that supplement market conduct principles, covering eight areas in the debt cycle: Lending product development. Service providers must offer lending products that are suitable to customers’ needs and repayment capabilities, avoiding encouragement of excessive debt. Loan interest rates should align with the borrower’s risk profile and credit characteristics (risk-based pricing) to ensure fair contract conditions. Advertising. Service providers must prepare and control advertisements with “correct and clear” content, presenting complete and comparable conditions, interest rates, and various fees to customers. The advertisements should not encourage excessive debt, enabling customers to make informed decisions and promoting financial discipline. Sales. In the selling process, service providers must ensure that customers receive complete, accurate, and unexaggerated information that facilitates appropriate consideration of decisions based on a correct understanding of the product or service. Products should also align with customers’ purposes or needs for fund utilization, avoiding encouragement of excessive debt. Consideration of debt repayment ability (affordability). Service providers must be conscientious in considering customers’ debt repayment ability, taking into account all obligations and residual income. Promotion of discipline and financial management. Service providers must provide important information and warnings to debtors, including regular reminders to promote responsible borrowing. Helping debtors with persistent debt.
Read More
December 15, 2023
As part of its membership in Lex Mundi, Tilleke & Gibbins has published an updated edition of its Guide to Doing Business in Thailand for 2023. This guide outlines the key factors for starting and operating a business in the Thai market. Issues covered include: Investment incentives Financial facilities Exchange controls Import and export regulations Structures for doing business Requirements for the Establishment of a Business Operation of the Business Cessation or Termination of the Business Labor legislation, relations, and supply Tax Immigration requirements This publication is part of Lex Mundi’s Country Guides series prepared by member firms in more than 100 jurisdictions worldwide. The guides serve as a useful resource for planning international business strategy and researching new markets. The full Guide to Doing Business in Thailand is available through the button below.
Read More