Crowdfunding has emerged as a promising option for raising capital, particularly for startups and small businesses. In Thailand, investment-based crowdfunding falls primarily under the regulatory purview of the Securities and Exchange Commission (SEC). The SEC is responsible for licensing and overseeing crowdfunding portals, ensuring compliance with regulatory requirements while ensuring investor protection and market integrity. The crowdfunding regulations in Thailand allow non-publicly traded companies to raise funds by offering equity and debentures for sale through SEC-licensed crowdfunding portals. This framework opens new possibilities for businesses seeking alternative funding sources and for investors looking for new opportunities.  Crowdfunding Portals Under Thai regulations, “crowdfunding portals” are defined as websites, mobile phone applications, or other similar electronic media developed for offering securities for sale. To operate a crowdfunding portal in Thailand, applicants must meet several key requirements: Incorporation: The applicant must be incorporated in Thailand. This requirement ensures that the portal operator has a significant local presence and is subject to Thai law. Minimum capital: A minimum paid-up registered capital of THB 5 million is required. This capital requirement helps ensure that portal operators have sufficient financial resources to maintain their operations. Operational readiness: The applicant must have crowdfunding portal systems ready for use upon applying to the SEC for approval to operate. This requirement demonstrates the applicant’s technical capability and readiness to provide crowdfunding services. These requirements are designed to ensure that crowdfunding portal operators are well-capitalized, technologically prepared, and committed to operating within the Thai market. Business and Investment Implications The regulatory framework for crowdfunding in Thailand offers non-publicly traded companies with an additional avenue for raising funds, as licensed crowdfunding portals provide a structured and regulated environment for fundraising. However, companies must ensure compliance with SEC regulations when offering securities through these platforms. For investors, crowdfunding offers new investment

One key component of Thailand’s support for the development of fintech innovations is its sandbox framework, supervised by the Bank of Thailand (BOT). This framework supports business operators in experimenting with new technologies under controlled conditions. This article explores the structure and significance of the BOT’s sandbox program in driving fintech innovation in Thailand. The BOT Sandbox Framework In June 2024, the BOT updated its sandbox framework to provide a more comprehensive and flexible environment for testing fintech innovations. The framework allows participants to experiment with their ideas in a controlled and limited environment, balancing the need for innovation with the imperative of maintaining financial stability and consumer protection. Three Types of Sandboxes The BOT’s framework encompasses three distinct types of sandboxes: the Regulatory Sandbox, the Own Sandbox, and the Enhanced Regulatory Sandbox. Regulatory Sandbox The Regulatory Sandbox is a mandatory testing ground for certain BOT-licensed financial services to ensure that potentially impactful innovations are tested and evaluated before wide-scale implementation. Participation in this sandbox is a prerequisite for: License applications for specific financial services. Implementation of new technologies or innovations in existing licensed services. Financial services that have the potential to become a structural element or standard of the Thai financial sector. A prime example of a service requiring participation in the Regulatory Sandbox is the Thai QR code payment via PromptPay system, which involved various banks several years ago until the Bank of Thailand granted permission for these services to be provided to the general public. Own Sandbox The Own Sandbox is an optional program that the BOT encourages for financial service providers and fintech operators implementing new technologies. This sandbox provides a more flexible environment for testing innovations that may not require the same level of regulatory scrutiny as those in the Regulatory Sandbox. Enhanced Regulatory

Following the U.S. Securities and Exchange Commission’s approval of spot Bitcoin ETFs, Thailand’s Securities and Exchange Commission (SEC) is reassessing regulations on the investments of mutual funds and private funds (collectively “Funds”). The SEC has launched a public consultation on new draft notifications introducing  the new asset classes that can be held by Funds, and aims to bring these rules into effect on January 1, 2025. The highlights of these changes are set out below. Eligible New Asset Classes The new asset classes that can be held by Funds can be categorized into two types—investment tokens and crypto assets—and the determination will focus on substance over form. Investment tokens: If the substance involves raising funds, regardless of what the assets are called, and they are legally issued and offered or approved by home regulators that are members of the International Organization of Securities Commissions (IOSCO), Funds can invest in these types of assets as transferable securities within the permitted ratio. Crypto assets: The eligible crypto assets which Funds are entitled to hold focus on crypto ETFs or offshore funds investing in crypto assets, and they are subject to investment limits. Funds can hold crypto assets directly, but only temporarily, and only for the purpose of purchasing, selling, or exchanging the crypto assets, not speculative purposes. The notifications state that Funds may hold Bitcoin/Ethereum for no longer than five business days and USDT/USDC for no more than one month. Investment Limits Typically, the rules segregate investment limits into listed and non-listed digital assets, and the limits depend on the sophistication of the investors in the Funds. In general, UI Funds (mutual funds offered to institutional investors or ultra-high net worth investors) can invest in these new asset classes without any limitations, although net exposure to other crypto assets  –  which

Thailand’s Electronic Transactions Development Agency (ETDA) issued guidelines for managing advertisements on digital platform services (DPSs) earlier this year. These guidelines aim to prevent fraud, illegal product or service offerings, and inducements to commit illegal acts, and are likely to provide a basis for greater regulation of this issue in the future. Key obligations for DPS business operators under the guidelines are detailed below. Advertiser Screening and Data Collection Verification and collection: Business operators must establish processes for verifying and collecting advertiser data. This includes steps, methods, and required information for advertiser registration. Identity verification: Business operators should follow identity verification requirements for advertiser registration. This may include using identity verification results from other identity providers or conducting their own identity verification processes with a minimum identity assurance level (IAL) of IAL2. Data storage: Advertiser data must be stored in a machine-readable format. Business operators must maintain records for watchlists, blacklists, and whitelists. Prepublication Advertisement Review Review process: Business operators should review advertisements before publication. This review should consider factors such as prohibited or restricted advertisements, required permissions, and avoiding sensitive user data. Postpublication Monitoring Advertisement monitoring: Business operators must monitor published advertisements using automated systems, staff, or contracted personnel. Criteria for prioritizing reviews should be established. Reporting channels: Business operators must provide channels for users to report illegal or inappropriate advertisements. Reports must be promptly addressed, prioritizing cases involving intellectual property owners or multiple credible reports. Advertiser account monitoring: Business operators must monitor advertiser accounts. This includes considering factors such as the number of reports/flags received and compliance with service agreements and community standards. For more information on this initiative from the ETDA, or on any aspect related to Thailand’s regulations for DPSs, please contact Athistha (Nop) Chitranukroh at [email protected], Thammapas Chanpanich at [email protected], Pornpan Wichawut at [email protected],