Foreign Exchange is not under the Supervision of the Securities and Exchange Commission of Thailand

Headline: Foreign exchange (Forex or FX) is not under the supervision of the Securities and Exchange Commission (“SEC”). Currently, no licences have been granted to individuals or entities other than banks and securities companies to trade or exchange national currencies for online investment or foreign exchange futures investment. Anyone who provides such services in Thailand is not authorised to do so by the Minister of Finance and would be subject to exchange control laws.

The SEC has the authority to promote, develop and supervise the capital and digital asset markets in Thailand, such as fund mobilization for a securities business^[1] by the offering of its shares and debentures, as well as digital tokens for investment and regulating securities trading according to the scope of powers and duties prescribed by the following acts of law:

• Securities and Exchange Act B.E. 2535 (1992) and its subordinate legislations;
• Derivatives Act B.E. 2546 (2003);
• Royal Decree on Digital Asset Businesses B.E. 2561 (2018);
• Provident Fund Act B.E.2530 (1987), including its amendments and subordinate legislation;
• Emergency Decree on Special Purpose Juristic Persons for Securitization B.E. 2540 (1997); and
• Trust for Transactions in Capital Market Act B.E. 2550 (2007).

Business operators under the supervision of the SEC, as per the Securities and Exchange Act and the Derivatives Act, namely the securities operators and derivatives business operators, provide services, such as being a stockbroker, investment advisor, underwriter, mutual fund manager and/or fund manager.

Moreover, business operators who are under the supervision of the SEC, according to the Royal Decree on Digital Asset Businesses, consist of digital asset exchange or trading operators, digital asset brokers, digital asset dealers and digital asset advisors.

Forex is trading one nation's currency for another, for which its business operators are not securities operators, derivatives business operators and digital asset business operators. Therefore, it is not under the supervision of the SEC.

Regarding the exchange control law in Thailand, the Exchange Control Act B.E. 2485 (1942) is the primary law which empowers the Minister of Finance to issue ministerial regulations to restrict or prohibit all operations related to money exchange or that involve foreign currency, as well as impose penalties on those who violate laws, announcements and orders.

According to Section 4 bis of the Exchange Control Act^[2], transactions related to foreign currency shall be executed only with those authorised by the Minister of Finance, e.g. commercial banks or securities companies. The list of licensees appears on the website of the Bank of Thailand ("BOT") (www.bot.or.th)

Currently, no licences have been granted to any individuals or entities, other than to banks and securities companies, to trade or exchange national currencies for online investment or foreign exchange futures investment. Anyone who provides such services in Thailand is not authorised to do so by the Minister of Finance and would be subject to the full extent of exchange control laws.^[3]

Reference: The SEC’s article published on 19 September 2022

https://www.sec.or.th/TH/Pages/MarketData/Articles.aspx

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact:

Nuttaros Tangprasitti
Partner

Maychaya Phoraksa
Attorney-at-law

^[1] Section 4 of Securities and Exchange Act B.E. 2535 (1992) and its amendments defines "Securities Business" as follows: (1) securities brokerage; (2) securities dealing; (3) investment advisory service; (4) securities underwriting; (5) mutual fund management; (6) private fund management; and (7) other businesses relating to securities as specified by the Ministry of Finance upon recommendation of the SEC.

^[2] Section 4 bis of the Exchange Control Act B.E. 2485 (1942) and its amendments indicates: "In purchasing or selling any foreign currency or letter of credit and remitting or transferring money abroad, a bank or any other person who has been authorised to transact an exchange business is required to transact its business in accordance with the Notifications or Directions of the Minister of Finance.

^[3] Section 8 of the Exchange Control Act B.E. 2485 (1942) and its amendments indicates: "Any person who contravenes or fails to comply with the Ministerial Regulations, Notifications or Directions issued under this Act shall be liable to a fine not exceeding Baht 20,000 or to imprisonment not exceeding three years, or both."

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