The Securities and Exchange Commission (SEC) plans to propose investing in distributed ledger technology (DLT) to its board of directors to create a digitised platform for all types of securities and investment products in Thailand's capital market.
DLT is a digital system for recording the transaction of assets where the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality.
The SEC's objective is to empower Thailand's capital market to cater to new trading services and the latest digital technology along with facilitating market participants in joining the digitised platform, said SEC secretary-general Ruenvadee Suwanmongkol.
Investing in the DLT system is costly and the SEC will ask for investment from the Capital Market Development Fund (CMDF), said Ms Ruenvadee.
"The Thai capital market has to increase market competitiveness and work efficiently in order to handle technological changes and the speed of the digital era," she said.
The CMDF was established earlier this year after the Securities and Exchange Act of 2019 came into effect.
The fund's objectives are to promote the development of organisations, infrastructures, personnel and competitiveness of the Thai capital market, as well as supporting education, research, training and academic work for the capital market.
The fund's initial assets came from 5.7 billion baht transferred from the Stock Exchange of Thailand (SET). Annual contribution from the SET is stipulated to be at least 90% of income after deducting expenses, taxes and reserves.
The SEC also plans to propose details for small and medium-sized enterprises (SMEs) and startups to raise funds via the SET in early September, aiming for business operators to have easier access for raising capital, said Ms Ruenvadee.
Listing conditions will be relaxed from the bourse's mandatory listing conditions to launch IPOs, but information disclosure, including risks, will be disclosed thoroughly, she said.
"The SEC not only has a regulatory role, but also has a duty to support capital market development. SMEs and startups are important as they employ around 14 million people and are one of the components driving Thailand's future economic growth," said Ms Ruenvadee.
SET president Pakorn Peetathawatchai said global connectivity and volatility have become "a new norm" and investors and entrepreneurs should prepare themselves to deal with the change.
In this new context, investors or fund providers will directly contact fundraisers through multiple electronic platforms, said Mr Pakorn.
The SET has developed services and products to attract these types of investors. For instance, Live Fin Corp's LIVE electronic trading platform, where 99.99% of shares are held by the SET, has been established to operate as a crowdfunding platform providing over-the-counter trading services for startups and SMEs.