
The Securities and Exchange Commission (SEC) is planning to launch a debt instrument trading system using distributed ledger technology (DLT) to persuade securities firms to participate in digital token trading, while also advancing its supervision in the digital era.
Jomkwan Kongsakul, deputy secretary-general of the SEC, said token investments are gaining traction.
The regulator has approved four digital token projects and is reviewing two more, focusing on green tokens and investment-based projects.
Five other parties have engaged in preliminary consultations with the SEC, exploring opportunities for both soft power tokens and green token innovative fundraising solutions, she said.
In the near future, the SEC will let securities companies trade digital tokens to capitalise on their large investor bases, said Ms Jomkwan.
"The SEC is leveraging technology to enhance efficiency in the capital market by promoting an electronic securities ecosystem. In the future, new regulations will be launched to facilitate the issuance of electronic securities and online purchases of debentures," she said.
Buying bonds from the primary market takes 7-14 days before they can be traded in the secondary market. There are also problems with investors being unable to access products, or some bonds being expensive and illiquid, said Ms Jomkwan.
On the issuer side, there is a lot of manual data such as paperwork that is delayed and can have multiple errors. By deploying advanced technology, the process is faster and more accurate, removing capital market hurdles, she said.
The SEC is preparing to deploy DLT to help develop the capital market in the digital era, said Ms Jomkwan. The regulator wants the entire bond trading system to be digitalised for both the primary and secondary markets for settlement, trading, investor registration and return payments.
Competition will not be restricted, she said, as firms with their own DLT infrastructure can develop independent chains, provided they maintain interoperability under a unified standard. A standardised framework for data connectivity within the digital securities ecosystem is essential. Those without their own chain can utilise the SEC's public chain at a reasonable cost, said Ms Jomkwan.
"In the future, there may be multiple chains for trade. Trading through DLT on all systems is connected by a share ledger, which is expected to be completed soon," she said.
"There will be two types of securities issuance, including products that start trading as digital-native products born from DLT, which are electronic securities."
Traditional products will still exist, but they will be converted to digital form as twin products to trade and change hands in the DLT system, which will make trading more efficient, said Ms Jomkwan. This allows fractional trading with lower prices and higher liquidity because there are more players, real-time trading, and less settlement problems, she said.
In addition, the regulator is creating the SEC Open API data platform for all listed companies so investors can analyse and make better investment decisions, said Ms Jomkwan.