Bangkok: The Securities and Exchange Commission (SEC) confirmed its review of the Third-Party Account to enhance capital market liquidity and the competitiveness of the Thailand Futures Exchange (TFEX), a move set to benefit investors.
According to Thai News Agency, the SEC's review focuses on business categories in Schedule Three of the Foreign Business Act. The goal is to minimize unnecessary barriers and introduce greater flexibility in the capital market and TFEX by permitting foreign investors to accept and deliver agricultural products domestically under stricter regulations. Despite these changes, foreign businesses must continue to comply with existing regulations and remain under SEC supervision.
The Cabinet recently approved draft regulations under the Foreign Business Act B.E. 2542 (1999), suggested by the Ministry of Commerce through the Department of Business Development. This prompted a review of business categories in Schedule Three tied to the capital market and TFEX. Presently, TFEX permits foreign investors to trade futures contracts based on agricultural commodities, but limitations exist in terms of domestic delivery and acceptance. This lack of flexibility hinders investor needs fully.
The SEC, in partnership with the Ministry of Commerce and TFEX, examined these limitations within the domestic market protection framework. The amendment adjusted Category Three's business list to incorporate domestic trading of indigenous agricultural products not legally prohibited. An exception was introduced for agricultural futures trading on TFEX, allowing the delivery or receipt of agricultural products in designated TFEX warehouses or for export. This adjustment grants foreign investors trading agricultural futures on TFEX the opportunity to deliver and receive domestically sourced agricultural products under specified conditions, previously restricted to export delivery only. Regulatory measures were implemented, including delivery through the TFEX system, storage in designated warehouses, and a product tracking system, to prevent off-system sales and ensure market fairness.
Additionally, the SEC is evaluating certain business types under the Securities and Exchange Act and the Derivatives Trading Act of 2003 to increase business flexibility under SEC supervision. This affects foreign businesses requiring case-by-case permits, especially those offering services consistently provided by Thai businesses that demonstrate competitive potential, such as repurchase agreements.
Mr. Anek Yoo-yin, Deputy Secretary-General and Spokesperson of the SEC, clarified that while the review exempts foreign businesses from certain regulations, they must still adhere to all relevant laws and regulations, remaining under SEC supervision like Thai businesses. The SEC expects this to foster a more efficient and fair competitive structure in the Thai capital market. It aims to enhance the quality and diversity of financial services, attract promising investors and businesses, boost market liquidity, and improve TFEX market efficiency. These efforts will benefit Thai investors and support the Thai capital market's development to meet international standards, ultimately strengthening the country's economy in the long term.