Bangkok, 17 December 2020 – The Securities and Exchange Commission (SEC) adds "Digital Asset Investment Advisor” and “Digital Asset Fund Manager” as two new types of regulated businesses under the Digital Asset Business Law to make the area of supervision more comprehensive. SEC also amends the regulations on digital asset business operators to provide more appropriate protection to investors.
According to the Ministerial Regulation Re: Granting of Approval for Undertaking Digital Asset Business (No. 2) B.E. 2563 (2020), which became effective on 27 November 2020, “Digital Asset Investment Advisor” and “Digital Asset Fund Manager” shall be two new types of digital asset business subject to SEC’s supervision. Therefore, any person who wants to conduct any of these new businesses is required to apply for an applicable license with SEC.
In this regard, SEC adopts the regulations on business conducting for “Digital Asset Investment Advisor” and “Digital Asset Fund Manager” purporting to ensure that the services investors will receive from the investment advisor or fund manager are up to the same standard of conduct obligated by other digital asset business operators. For instance, Know Your Customer (KYC), fit and proper personnel, standard sales process, management of customers’ digital assets and related data, and capital adequacy. There are also new provisions about the accountability of the business operator when outsourcing its business-related function to a third party which will apply to all types of digital business operators.*
In addition, SEC has amended other parts of regulations which will apply to all types of digital asset business operators in order to provide more appropriate protection to investors. Examples of the amended regulations are revising the percentage of digital asset that required to keep in a non-network-connected system unless the online execution of transaction is warranted (cold wallet); specifying the qualification of a digital asset custodian; and laying down the regulations on sale promotion advertisement, engagement of introducing broker agent, and disclosure of brokerage transaction activities, which will come into force starting from 1 January 2022 onwards. In considering these amendments, SEC has taken into account opinions received from business operators and related parties during the public hearing which took place earlier.
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Note: *effective from 1 January 2022.