Bourse studying digital asset applications

Bourse studying digital asset applications

Digitalisation key to SET's future trade

SET president Pakorn Peetathawatchai. WICHAN CHAROENKIATPAKUL
SET president Pakorn Peetathawatchai. WICHAN CHAROENKIATPAKUL

The Stock Exchange of Thailand (SET) is assessing four applications for possible integration to jump-start its digital asset ecosystem project.

"We have hired consultants in two areas to look into our applications. We have chosen four applications already," said SET president Pakorn Peetathawatchai.

"However, all these applications need to comply with Thai laws and regulations. Also, we will have to look into which propriety we will employ."

The bourse has already conducted a workshop with intermediaries and other parties involved in the capital market to listen to project feedback and planned technologies, said Mr Pakorn.

It was reported earlier this year the SET plans to develop a digital asset ecosystem or an end-to-end platform for digital assets in 2020 by structuring core infrastructure such as the issuing process, asset tokenisation, trading systems, settlement systems, e-wallet and custody providers.

The SET will need to apply for licences to operate all types of services for a digital exchange, and the bourse may join hands with partners experienced in digital asset trade.

E-wallet and custody providers involved with security and trading information are among the most crucial parts of the digital asset trading system.

The digital asset exchange will be the future of the SET, which goes hand-in-hand with developing the traditional exchange, he said.

Under the royal decree on digital assets that took effect on May 14, 2018, there are four types of secondary business intermediaries: digital exchanges, brokerage firms, dealers and other businesses relating to digital assets as prescribed by the Finance Minister under the Securities and Exchange Commission's (SEC) recommendation.

Exchanges, brokers and dealers are required to apply for licences from the Finance Ministry, while ICO portals must be approved by the SEC.

Regarding the newly approved Super Savings Fund (SSF), the fund's tax privileges seem to benefit middle-income earners more than high-income earners on the surface, but an in-depth investigation into taxpayer data in different tax brackets and the amount they invest each year is needed for a thorough assessment, said Mr Pakorn.

"The Revenue Department has looked into this matter and they must have reason to believe [the SSF's tax privilege scheme] would benefit a large chunk of people who are not high-income [earners]," he said.

On Dec 3, the cabinet approved the SSF as a new tax-saving fund to replace long-term equity funds (LTFs), for which the tax incentive is due to lapse at year-end.

The tax-deductible amount is capped at 500,000 baht per year as a combined amount for contributions to the SSF, retirement mutual funds, provident funds, the Government Pension Fund, the National Savings Fund and pension insurance premiums.

The lock-up period for contributions to SSFs is 10 calendar years.

SSF investment conditions are more relaxed than those for LTFs, as SSF units can invest in any assets, while LTFs stipulate equities as the major investment asset.

There is no minimum contribution requirement for SSFs, and individual taxpayers are not required to make continuous contributions.

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