On 7 December 2023, the SEC Board Meeting No. 17/2566 passed a resolution approving, in principle, the proposed regulations related to ICO Governance. The SEC is therefore conducting this public hearing on the proposed principles and relevant draft regulations which aim at ensuring that the ICO rules have adequate and appropriate mechanisms for protecting investors while promoting the ICO issuer’s awareness and responsibility over project management for the benefit of digital token holders and increasing confidence in both fundraising and investment through ICOs. The proposal contains the following essences:  

(1) Requirements regarding the check and balance mechanism and the responsibilities of the ICO issuer's board of directors: the ICO issuer must establish a check and balance mechanism and measures to prevent and manage conflicts of interest. Such mechanism and measures must be clearly outlined in the ICO filing. Additionally, specific significant matters would require approval from the issuer's board of directors. This is to ensure that the board is committed and responsible for decision-making and the disclosure of information related to ICO project;   

  (2) Token holder resolutions: To improve the regulations regarding token holder resolutions and relevant procedures, the SEC proposes a set of rules involving methods and reasons for seeking votes from token holders, the determination of votes, and the organization of token holder meetings, etc. The proposed regulations are in line with similar measures imposed on real estate-backed tokens;   

(3) ICO advertisement: The SEC proposes additional rules regarding ICO advertisements. Essentially, such advertisements must refrain from enticing or pressuring investors into uncareful investment decisions. Moreover, they must not imply guaranteed returns and appropriate warnings about investment risks must be included. In case of using or referring to external information, the advertisements must ensure that the sources of such information are reliable and clearly specified. Advertisements must also align with other relevant requirements such as those for marketing promotions and deduction related to advertising expenses. Additionally, the issuer must ensure that third-party advertisers also comply with relevant regulations.          

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=968 and the central legal hub: https://law.go.th/. Stakeholders and interested parties are welcome to submit comments and suggestions through the websites or email: kanjanachat@sec.or.th, thapanee@sec.or.th or pitchal@sec.or.th. The public hearing ends on 6 February 2024. 

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