The Securities and Exchange Commission (SEC) plans to present its development plan on distributed ledger technology (DLT) next week, then convey information to the Capital Market Development Fund (CMDF) board next month to seek project financing.
The market regulator will hold a press conference to present its capital market development blueprint on Nov 19, with a pilot case applying DLT to traditional securities offering, said Archinee Pattamasukhon, director of the intermediaries policy department.
The SEC intends to pick a type of traditional securities and develop it, from the offering process to asset depository, through digitisation, said Ms Archinee.
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 administrative 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.
Having a single DLT platform will act as the "main road" for clearing and settlement by securities companies as they could connect through a single, seamless platform without having to shoulder a heavy investment cost to develop their own DLT system, she said.
The SEC has appointed Accenture as technology consultant and Baker & McKenzie as legal consultant for its DLT development plan.
As DLT investment requires a huge investment sum, the SEC plans to request funding from the CMDF. The CMDF was established earlier this year.
The fund's objectives are to promote the development of organisations, infrastructure, 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). The annual contribution from the SET is stipulated to be at least 90% of income after deducting expenses, taxes and reserves.
Integrated with a smart contract feature and a decentralised log book similar to the blockchain technology, DLT can serve as a clearing and settlement platform for all securities transactions in the secondary market as well as facilitating management of investment funds, said SEC secretary-general Ruenvadee Suwanmongkol.
The DLT development plan was initiated in June and the project will be implemented through different phases to develop capital market instruments, said Mr Ruenvadee.
"The SEC has set up a committee to oversee the DLT project to drive the whole capital market in the same direction," she said.