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 29, 2024

Thailand Updates Requirements for Digital Asset Business Governance and Exchange Rules

Subscribe to Updates

Thailand’s Securities and Exchange Commission (SEC) has revised its regulations on digital asset operators and exchanges to impose stricter governance standards on digital asset business operators and to align digital asset exchange rules with international standards. The new regulations are laid out in SEC Notification No. GorThor. 23/2567 on the Criteria, Conditions, and Procedures for Operating a Digital Asset Business (No. 24) and SEC Notification No. GorLorThor. 24/2567 on Determination of Prohibited Qualifications for Directors and Executives of Digital Asset Business Operators (No. 5). These were published in the Government Gazette on August 16, 2024, with most of the provisions taking effect on the same date.

Governance for Digital Asset Businesses

The heightened standards for digital asset business operators aim to ensure efficient business supervision and appropriate response to operational risks. The new requirements mainly address:

  • Board of directors composition. Large-sized digital asset business operators (i.e., those with at least 10,000 customers and holding customer assets of at least THB 500 million) who do not provide digital asset custodian services must have at least five directors, at least two of whom must be independent directors. In addition, the business operators must establish an audit committee, with at least two members being independent directors, to create an appropriate “check and balance” mechanism within the organizational structure. Current digital asset business operators must comply with the requirements within 180 days of the notification’s effective date.
  • Qualifications of authorized directors and managers. Authorized directors and managers are now required to (1) either have at least one year of working experience in the digital asset field or have participated in a digital asset course from an SEC-approved list, and (2) participate in a good corporate governance course recognized by the SEC. Current authorized directors and managers who have not previously completed a good corporate governance training course must complete such a course within one year of the notification’s effective date.
  • Management and operational structures. Check-and-balance mechanisms are required for every major operational system. Business operators must establish a customer asset management policy, and all customer assets in the business operator’s custody must be managed according to the security risk and by separate personnel from other operational personnel that may have a conflict of interest. Business operators must also provide a customer service system that is suitable to the risk and complexity levels of the relevant types of digital assets.

Exchange Rules

The SEC has also introduced new minimum requirements for digital asset exchange rules, which must be approved by the SEC. The key updates include:

  • Listing and delisting rules. As indicated by a new utility token supervisory scheme that was issued days earlier, group 1 utility tokens are not allowed to be listed on the exchange. (Group 1 utility tokens are those issued for consumption purposes or as a digital representation of a certificate, such as loyalty points, concert tickets, NFTs, and carbon credits.) In addition, listing rules now require adoption of the “silent period” concept, whereby tokens offered for sale below the market price cannot be listed in the six months after the offering. In terms of issuer disclosure, digital asset exchanges must now require digital token issuers to disclose information as stipulated by the SEC.
  • Trading, clearing, and settlement rules. Digital asset exchanges are now required to have a real-time trade monitoring system to detect abnormal trades, and daily monitoring reports must be submitted to the SEC. If the digital asset exchange finds suspicious action, it must promptly report this to the SEC. The digital asset exchange must also have signposting to inform investors about potential risks from investing in certain tokens.
  • Market makers. Digital asset exchanges with market makers must have rules on qualifications, scope of work, ongoing performance supervision, and noncompliance measures relating to market makers.

For more information on these new 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

Technology

Location

RELATED INSIGHTS​ 

January 2, 2024
Myanmar’s Ministry of Commerce (MOC) has released updated information regarding the registration fees for online retail businesses. The fees and criteria, which are included in the MOC’s Export/Import Newsletter No. 17/2023 dated December 28, 2023, are laid out below. Registration Fees The official registration fees vary depending on the applicant type: Companies or other commercial organizations: MMK 70,000 (approx. USD 33.5) for registration and renewal; MMK 3,000 (approx. USD 1.5) for each amendment. Small and medium enterprises (SMEs): MMK 50,000 (approx. USD 24) for registration and renewal; MMK 3,000 (approx. USD 1.5) for each amendment. Individual applicants: 30,000 MMK (approx. USD 14.5) for registration and renewal; MMK 3,000 (approx. USD 1.5) for each amendment. Validity Period Registrations approved from January 1, 2024, will be valid for two years from the date of grant. The requirement for online retail businesses to register their operations was announced in July 2023. Based on statements from the MOC, online retail businesses need to complete their registration by late January 2024 to avoid potential enforcement actions. Regarding SMEs, the MOC will also evaluate their SME registration certificate issued by the Agency Office under the Small and Medium Enterprises Development Law 2015. For assistance completing the registration process, or for more details on any aspect of online retail operations in Myanmar, contact Tilleke & Gibbins at [email protected].
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
December 15, 2023
Vietnam’s new Law on Electronic Transactions No. 20/2023/QH15 (LOET 2023) was promulgated by the National Assembly on June 22, 2023, and will replace the existing Law on Electronic Transactions No. 51/2005/QH11 (LOET 2005) when it enters into effect on July 1, 2024. The LOET 2023 is aimed at facilitating transactions carried out in an electronic environment in all sectors. Derived from the fundamental principles of the LOET 2005, the LOET 2023 is similarly considered a framework law, developed based on the Model Law on E-Commerce of the United Nations Commission on International Trade Law (UNCITRAL). The main points of interest of the LOET 2023 are summarized below. 1. Scope of Application Unlike the LOET 2005, which explicitly excludes certain areas such as the issuance of certificates of land use rights and birth certificates from the scope of application, the LOET 2023 covers all areas without exception. However, the LOET 2023 will still not interfere with the regulations of substantive laws that stipulate the content, conditions, and forms of transactions in their respective areas (Article 1.2). The LOET 2023 also provides that it will only be applicable if other laws either allow or remain silent on the electronic execution of transactions; otherwise, if another law specifically does not permit a transaction to be carried out electronically, such law shall apply (Article 1.3). This emphasizes that the applicability of the LOET 2023 depends on the electronic readiness of specific sectors. 2. Enabling E-Transactions in All Sectors For traditional transactions or contracts to be legally valid, they typically require written documentation, the signatures of the involved parties, and the seals of organizations or companies, if required by substantive laws or common practice. Additionally, certain sectors mandate further steps like notarization or certification, such as in property transactions like house sales or inheritance
Read More
December 8, 2023
In a significant development on December 5, 2023, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/2937 granting authorized dealer licensed banks (ADLBs) the authority to freely transact in foreign currency trades, buying and selling at the market exchange rate for Myanmar kyat (MMK) as proposed by buyers and sellers through online trading platforms. Offshore remittances, however, must comply with the remittance criteria set by the Foreign Exchange Supervisory Committee. The online trading platform Refinitiv, initiated in June 2022 under the CBM’s guidance, facilitates the buying and selling of foreign currency between ADLBs and between banks and customers. The initiative was implemented in accordance with CBM Letter No. FE-1/789, dated June 21, 2023. The platform’s inception saw the exchange rate set at over MMK 2,900 per USD 1. Then, in August 2023, the CBM ordered banks and traders to limit foreign exchange transactions to an approved online trading platform, again with the exchange rate fixed at MMK 2,900 per USD 1. Transactions outside of online trading platforms continue to be governed by the exchange rate set by the CBM of 2,100 MMK per USD 1. Conversion Rules for Exporters On December 6, 2023, the CBM issued Notification No. 26/2023 lowering the percentage of Myanmar companies’ export earnings in foreign currency subject to mandatory conversion into MMK from 50% to 35% at the current official exchange rate set by the CBM at USD 1 to MMK 2,100. This mandatory conversion must follow the requirements for mandatory conversion of foreign currency, which remain in effect. For more details on foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].
Read More