The Securities and Exchange Commission (SEC) plans to restrict Thais from investing in non-voting depository receipts (NVDRs) and is holding a public hearing to prohibit securities companies from providing such services.
The regulator said in a statement the public hearing is on prohibiting securities companies from providing any services that allow Thai investors to acquire more securities in the form of depository receipts for benefits arising from Thai underlying securities or NVDRs.
The regulator sees NVDR securities "as a tool to avoid compliance with relevant regulations, or as a way to conceal shareholding information", which may lead to inappropriate behaviour in the capital market or cause investors to lack information that may affect their investment decisions, said the SEC.
"The SEC deems it necessary to improve the criteria for providing NVDR transaction services. We are open to listening to the opinions of those involved," the statement noted.
Initially, securities companies are prohibited from accepting purchase orders, receiving transfers, or exchanging securities that result in increased NVDR securities for Thai investors.
If securities companies have clients that are foreign securities companies, they must not accept orders, receive transfers, or exchange securities.
The SEC is scheduled to hold the public hearing until Feb 6 via the SEC website.
The regulator is also holding a public hearing on improving the governance principles for digital token holders' benefits to increase confidence both in fundraising and investments in digital tokens.
The SEC board approved the improved principles governing the sale of digital tokens to the public or initial coin offerings (ICOs) to ensure there is adequate and appropriate mechanisms to protect investors' rights.
The regulator wants to encourage digital token issuers to be responsible for token holders, increasing confidence in both fundraising and investment in ICOs.
Salient points of the improved criteria include requirements for issuers to have a checks and balances mechanism to preserve the rights of digital token holders, as well as measures to prevent and manage conflicts of interest.
The proposal specifies matters that must be resolved by the issuer's board of directors, ensuring the board is jointly responsible for making decisions and disclosing information related to digital token issuance.
Another requirement is for ICO advertising to comply with additional criteria, including not rushing investors to make investment decisions, not having any guiding characteristics or guarantees for returns, providing appropriate warnings about investment risks, and identifying reliable and clear sources of information in addition to promotional items.
In addition, the deduction of advertising expenses for digital tokens must be in line with relevant criteria, said the regulator.
The hearing on the principles is slated to be held until Feb 6.