SEC’s Draft Legislation: Strengthening Thailand’s Capital Market

Mahanakorn Partners Group Co | View firm profile

Introduction

Thailand’s Securities and Exchange Commission (SEC) has identified the necessity for a thorough overhaul of its regulatory framework to keep pace with evolving socio-economic conditions, technological progress, and the dynamic nature of private sector innovation. Current laws have faced criticism for their ambiguity, lack of alignment with global standards, and insufficient mechanisms to enforce criminal liability in areas such as securities, derivatives, and digital assets.

I. Key Draft Regulations

The SEC has drafted four major new regulations to modernize the capital markets framework.

Draft Securities and Exchange Act
Draft Derivatives Act
Draft Trust for Transactions in Capital Market Act
Draft Act to Amend the Royal Decree on Digital Asset Business

These changes are designed to promote transparency, remove barriers, and establish robust legal mechanisms in line with international standards, benefiting operators, investors, and the public.

No.	Topic	Details
1	Promoting the Digital Capital Market	Amendments to fully support electronic processes in the market New regulations for service providers crucial to capital market operations
2	Supervision of Securities and Derivatives Business Operators	Enhanced supervision of major shareholders of business operators. New provisions for supervising personnel involved in securities and derivatives businesses. Mandatory announcement of financial statements. Business dissolution procedures in the event of license revocation.
3	Supervision of Secondary Markets and Related Organisations	New provisions to reduce restrictions on the establishment and operation of trading centers. Additional regulatory measures to enhance supervision and operational efficiency. New provisions for investments in securities offered by associations.
4	Fundraising and Auditing Firm Supervision	Improved regulations for the issuance and offering debt instruments. Clear guidelines on mergers and acquisitions(M&A) Supervision of auditing professionals
5	Low Enforcement and penalties for Non-Compliance	Designated authority for SEC officers to investigate specific offenses New measures to align securities
6	Regulatory Bodies under the SEC	New requirements and prohibited characteristics for SEC expert committee members Clarification that SEC is not governed by social security laws

Figure 1. Proposed Draft of the Securities and Exchange Act.

No.	Topic	Details
1	Electronic Processes in the Capital Market	New provisions enabling operations and processes to be conducted electronically. Legal recognition of the validity of electronic transactions in the capital market.
2	Supervision of Derivatives Business Operators and Related Entries	Revised regulations for supervising derivatives business operators, secondary markets, and associated organisations. Mandatory requirements for derivative advisors to maintain accurate records and disclose operating results and financial status Enhanced supervision of other market participants, including investment advisors, planners, analysts and contract managers
3	Witness Protection Measures	Additional safeguard for witness during investigations and evidence collection in criminal cases. Protection from civil and criminal liability, except for individuals directly involved in the wrongdoing
4	Investigate Authority of SEC Officials	Authority grated to SEC officials to act as investigative officers for handling specific offenses.

Figure 2.Proposed Draft of the Derivatives Act.

No.	Topic	Details
1	Electronic Processes in Capital Market	Introduction of new provision enabling various operations and processes to be conducted electronically. Legal recognition of the validity of electronic transactions in capital markets
2	Witness Protection Measures	Enhanced protections for witnesses during examinations and evidence-gathering processes conducted by authorities in cases involving serious crimes. Witnesses will be granted protections as outlined in relevant laws governing protection in criminal cases. Safeguard against criminal and civil liability for witnesses who provide factual information, evidence, or documentation in good faith to the SEC, with exemptions for individuals directly involved in the offense.

Figure 3.Trust for Transactions in Capital Market Act and Draft Amendment to the Royal Decree on Digital Asset Business.

II. Preparing Businesses For Regulatory transition

Adapting to SEC’s proposed regulatory updates requires businesses to take proactive steps to ensure compliance and capitalize on emerging opportunities. Here are key recommendations:

1. Familiarize yourself with the Regulations

Thoroughly review the proposed legislation and, if necessary, consult with professionals to fully understand its implications and compliance requirements.

2. Assess Current Practices

Conduct a comprehensive evaluation of your existing operations and policies. Identify areas that may need to be adjusted to comply with the upcoming regulations.

3. Train Employees

Improve workforce readiness by offering training programs or organizing in-house sessions to ensure employees are equipped to understand and effectively implement the new standards.

4. Engage with Authorities

Foster open communication with regulatory bodies to seek clarification, offer feedback, and establish cooperative relationships that support compliance efforts.

5. Monitor Implementation Timelines

Stay updated on regulatory timelines, including the effective dates of new provisions, and plan accordingly to ensure changes are implemented on time.

6. Prepare for Enforcement

Strengthen your compliance framework by creating a response plan. Maintain detailed records and documentation to demonstrate adherence to the updated regulations during audits or reviews.

III. A leap forward for Thailand’s Capital Market

The SEC’s draft revisions represent a major step toward modernizing Thailand’s capital market. By bridging existing gaps and aligning with international standards, these updates aim to create a more transparent, efficient, and competitive financial ecosystem. Businesses that actively prepare for these changes not only secure compliance but also gain a strategic advantage in navigating an evolving regulatory landscape.