SEC of Thailand Initiates Public Consultation on ICO Framework
The Securities and Exchange Commission (SEC) of Thailand has initiated a public consultation aimed at modifying the framework surrounding Initial Coin Offerings (ICOs) to enhance investor protections. On Friday, the SEC disclosed that it is seeking feedback on proposals that would lighten the existing knowledge testing obligations for cryptocurrency investors while introducing mandatory broad-ranging suitability evaluations.
Proposed Changes to Investor Testing Requirements
Currently, the regulations stipulate that investors must undergo a knowledge test every quarter before they are permitted to engage with ICO platforms. The SEC’s new recommendations would enable investors who have previously passed such tests to forgo future assessments, thus minimizing redundancy.
According to the SEC, these proposed alterations focus on two main aspects of investor protection:
- The initial requirement for non-institutional investors, who do not fall into the ultra-high-net-worth or high-net-worth categories, to complete a knowledge test prior to investing—unless they can prove previously passing it.
- A demand for ICO platforms to implement thorough suitability tests to ascertain that investors comprehend the investment risks involved and have a risk tolerance that aligns with the respective risks of the investment products.
Adjustments to Suitability Review Frequency
Rather than the prior obligation for quarterly updates on suitability, the recommendations would only necessitate reviews every two years. The SEC emphasized that the intention behind these adjustments is to alleviate the regulatory load on both ICO portals and investors, eliminating the need for frequent evaluations. These updates are said to harmonize the rules with existing practices in both securities and digital asset sectors.
Industry Perspectives on the Proposed Measures
Jagdish Pandya, the founder of Blockon Ventures and organizer of Thai Blockchain Week 2019, acknowledged Thailand’s unique position as a forerunner in crypto regulation, asserting that the SEC’s proactive stance has placed it ahead of regional counterparts such as Singapore, Malaysia, the Philippines, and Vietnam.
He also commented that the proposed measures would safeguard “amateur investors” from impulsively diving into ICOs and making similar errors from earlier ICO fraudulent ventures.
Exemptions and Future Considerations
In the revised framework, professional investors would continue to be exempt from the knowledge testing requirements. Stakeholders have until August 1 to provide their insights on the new proposal, which might significantly influence how ICOs are conducted in Thailand.
The SEC’s regulatory efforts are not limited to ICO modifications; in June, they also launched discussions aimed at allowing exchanges to list self-issued tokens under stricter disclosure protocols to mitigate insider trading risks. Furthermore, the Thai government is exploring pilot projects for cryptocurrency tourism payments in prominent locations like Phuket, while also evaluating the retail introduction of spot Bitcoin exchange-traded funds.
