Thailand's Parliament approves the issuance of tokenized securities

Thailand’s Parliament approves the issuance of tokenized securities

The National Legislative Assembly in Thailand has approved the issuance of scripless and tokenized securities through blockchain technology. The assembly endorsed an amendment to the Securities and Exchanges Act earlier this month. The Act will take effect in the first half of this year, making it possible to trade stocks and bonds on the blockchain.

The country’s Securities and Exchanges Commission is expected to lay out the relevant guidelines, the Bangkok Post reported. The SEC could commission a securities depository license for the tokenization platform.

According to the SEC’s deputy secretary general, the commission amended the Act to serve the tokenization platform in the future. Tipsuda Thavaramara believes that this is the first step towards building a digital asset ecosystem.

“The regulator also aims to unlock some traditional operating systems to increase market efficiency,” she added.

In its previous form, the amended Act stipulated that Thailand Securities Depository Co Ltd was the only company allowed to Act as a securities depository for the country’s securities trading operations. Thailand Securities is a subsidiary of the Stock Exchange of Thailand.

The commission also amended the act to cater to the issuance of scripless securities and digital tokens. Under the new Act, IPOs, ICOs and Security Token Offerings (STOs) will be based on scripless issuance.

Scripless issuance is securities trading where the security holding is represented by book entries and no physical certificate is issued.

Under the new Act, companies will be able to issue a security token offering under a legal mandate. This will make Thailand one of the first countries globally to legalize the STO industry, an industry hailed as the future of the digital currency market.

According to Pariya Techamuanvivit, a director at the SEC, the regulator will have the final say on whether a company can issue securities in the form of digital tokens. An STO can also be regulated under the new Act or under the digital asset royal decree. This will depend on the tokens rights and obligations, Pariya pointed out.

If a security token gives its holders similar rights to a stock, a bond or a mutual fund unit, it will be governed by the Act. An example is a token that gives its holders the right to receive dividends, share profits and vote.

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