Digital Transformation in Enforcement Measures of Capital Market
As the laws under the supervision of the Securities and Exchange Commission (“SEC”) do not respond to practical, (1) the technological changes, as some procedures cannot be fully utilized electronically, (2) the legal proceedings are not fully effective under current law, and (3) the penalties are inconsistent with statutory penalties and the legal supervision is unclear and inconsistent. Thus, they resulted in the following law amendments, including transforming services into digital systems, increasing the country’s competitiveness, and ensuring that the public has easy access. The following regulations have been approved in principle and recently acknowledged by the cabinet:
- The bill of the Securities and Exchange Act as amended No. .. B.E. …. (“Item 1”)
- The bill of the Derivatives Act as amended No. .. B.E. …. (“Item 2”)
- The bill of the Trust for Transactions in Capital Market Act B.E. 2550 (2007) as amended No. .. B.E. …. (“Item 3”)
- The bill of the Emergency Decree on Digital Asset Business B.E. 2561 (2018) as amended No. .. B.E. …. (“Item 4”)
The essence of these 4 amendments is to guarantee the use of appropriate technology for proceeding with the various transactions in the capital market, creating clarity in supervision, and increasing efficiency in law enforcement. The subjects of the four bills mentioned above that have been amended and stipulated are as follows:
- Increasing support for electronic processes in capital markets (e.g. requesting permission, reporting, submitting, or filing documents shall be performed only via electronic channels.)
- Specifying additional witness protection in inspection and gathering the evidence by competent officials according to the agreement between the Witness Protection Office and the Securities and Exchange Commission under the same guidelines as the Witness Protection Act B.E. 2546 (2003).
Further amendment of each bill are as follows:
- Amending the authority of the competent officer of the office of the Securities and Exchange Commission to have the power as same as that of an inquiry officer so that such officer will be able to investigate certain offenses in Item 1, Item 2, and Item 4.
- Amending the penalties in Item 1 and Item 2.
- Amending the supervision of secondary market securities business operators and authorities related to the securities business in Item 1.
- Improving the fundraising system and supervision of auditors and capital market professionals in Item 1.
- Adding the principles regarding collecting fees for business operation, professional practice, and other services as approved by the Securities and Exchange Commission in Item 1.
- Improving the supervision of derivatives business operators, secondary markets, and related organizations and persons in Item 2.
Also, the cabinet has acknowledged in regard to the preparation of the subordinate legislation which will be issued by virtue of the aforementioned 4 bills as proposed by the Ministry of Finance.
In conclusion, these four bills will support the promotion of the digital capital market. Investors and business operators will be easier to access the capital market. At the same time, the authorities will be easier to monitor business operators in the secondary market and capital market.