The Securities and Exchange Commission (SEC) is set to conduct a public hearing on regulating the initial coin offering (ICO) transactions in efforts to prevent investment scams similar to those that have occurred in other countries.
SEC deputy secretary-general Tipsuda Thavaramara said the regulator is preparing to conduct a public hearing with participating investors on ICO regulations and regulatory approval by the SEC.
"Thailand's capital market needs a new type of investor. If we prohibit new innovations or transactions, we will lose opportunities to build the new [crowdfunding] ecosystem to drive the country towards the Thailand 4.0 policy," said Mrs Tipsuda.
An ICO is a type of fund-raising scheme that is increasingly becoming popular among tech startups, enterprises and investors.
ICO transactions are similar to crowdfunding, where an issuer presents a business model to investors, but the difference is that the raised funds are in the form of digital currencies using blockchain technology, and the contracts are enforced under smart contracts.
Mrs Tipsuda said the capital market needs people who will take care of an investment banker's role for ICO transactions.
Those parties will be responsible for three key roles: reading the white papers offered by ICO issuers and verifying whether the business model makes sense; verifying and enforcing the source code of smart contracts; and conducting the "know-your-customer" process for transparency.
In the first stage, the SEC will allow retail investors to put up to 300,000 baht per company in ICO funding, said Mrs Tipsuda.
"There is one trading portal that has shown interest and many startups have also expressed enthusiasm for ICO funding," she said.
Mrs Tipsuda said the public hearing process is expected to be completed and ready for implementation before the Fintech Act goes into effect.
The Fintech Act is in the revision process, after which it will be proposed to the National Legislative Assembly.
The Act is expected to be implemented next year.
The SEC is also in the process of revising the SEC Act to allow operations of the new electronic trading platform.
