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Thailand: SEC cobbles together investor protection fund amendment
The Securities and Exchange Commission (SEC) expects to conclude a proposal to amend the digital asset royal decree by the first half next year, aiming to set up an investor protection fund to mitigate incurred damages.
An initial amendment will enhance investor protection for damages caused by authorised digital asset intermediaries, but losses derived from digital asset investments by individual investors will not be covered, said SEC secretary-general Ruenvadee Suwanmongkol.
Another amendment concerns the SEC’s role in regulating Thailand’s digital asset trade as more digital assets need to be regulated, said Ms Ruenvadee.
The upcoming amendments will be the seventh time changes have been made to the digital asset royal decree.
Thailand has one traditional securities exchange (the Stock Exchange of Thailand) operating under the Securities and Exchange Act, while the three digital asset exchanges operate under the digital asset royal decree.
Under the royal decree on digital assets that took effect on May 14, 2018, there are four types of secondary business intermediaries: digital exchanges, brokerage firms, dealers and token portal service providers, also known as initial coin offering (ICO) portals.
Exchanges, brokers and dealers are required to apply for licences from the Finance Ministry, while ICO portals must be approved by the SEC.
Pursuant to the royal decree, digital assets cover cryptocurrencies, digital tokens and any other electronic data unit, as specified by the SEC.
Sellers of unauthorised digital tokens and those setting up unauthorised seminars to solicit cryptocurrency investment will be fined no more than twice the value of the digital transaction or at least 500,000 baht. They could also face a jail term of up to two years.
Investors who make digital asset-related trades will be liable for a 7% value-added tax (VAT) payment, on top of the 15% withholding tax on capital gains and returns from such investments.
Retail investors will be exempt from paying VAT if they trade digital assets through exchanges. Those who have no capital gains will only pay VAT. But investors will be required to pay VAT if their trades produce no capital gains.
The Federation of Thai Capital Market Organizations will have a meeting with Finance Minister Uttama Savanayana next week to discuss four main issues that have been submitted by the group, said chairman Paiboon Nalinthrangkurn.
These topics comprise facilitating small and medium-sized enterprises gaining greater access to Thailand’s money and capital markets; providing investment knowledge to the public to increase the number of investors in the capital market; discussing ways to develop the local capital market following the establishment of a committee overseeing capital market development with both public and private representatives; and seeking clarity on an investment fund set to replace the long-term equity fund.
Source: https://www.bangkokpost.com/business/1794479/sec-cobbles-together-investor-protection-fund-amendment