During April – May 2023, the SEC conducted a public hearing to seek comments and suggestions on the proposal to amend the regulations governing the optional systems of digital asset business operators. This was followed by a focus group session aimed at gathering opinions from DA operators regarding the proposed amendments to the governance structure and qualifications of authorized directors and managers of DA operators. The SEC has reviewed and considered the comments and recommendations received from both sessions in drafting the relevant regulations to ensure more appropriate and consistent practices within the DA industry. 

On 15 August 2023, the SEC Board Meeting No. 13/2566 gave its initial approval to the proposed amendments. The proposed amendments contain the following essences:   

(1) Board governance structure: Requiring DA operators – except DA advisors and the DA operators holding client assets at an amount less than 500 million baht and having less than 10,000 clients – to appoint at least five members to the board of directors, and of this at least two board members shall be independent directors, as well as to establish an audit committee. These requirements aim to ensure that DA operators will have a proper organizational structure with checks and balances in their management and the board of directors will be able to perform their duties more efficiently, taking into consideration the benefits of customers and stakeholders. Additionally, the current DA operators will be required to comply within 180 days from the effective date of the regulations; 

(2) Qualifications of authorized directors and managers: Requiring DA operators to appoint a person with at least one year of experience in digital assets or completes the SEC-recognized digital asset course to be the authorized director and the manager. Additionally, these appointees will be required to participate in the SEC-recognized corporate governance training. If the authorized director or manager of DA operators has never taken the corporate governance course, he or she must complete the course within one year from the effective date of the regulations;  

(3) Business operations standards: Requiring DA operators to: 
- have robust checks and balances mechanisms in place in every critical business system;  
- have effective business continuity management and plans;  
- have a customer onboarding and Know Your Customer system (KYC) that are appropriate to evaluate product risks against characteristics of each customer; 
- separate departments or personnel responsible for customer assets safekeeping from other operational areas to prevent conflicts of interest. Additionally, DA operators will be required to establish internal rules or procedures for customer asset safekeeping.   

In this regard, the current DA operators will be required to comply with the regulations on business operations standards within 90 days from the publication date of the regulations. 

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=952. Stakeholders and interested parties are welcome to submit comments and suggestions via the website or email: thanapatk@sec.or.th, pitchal@sec.or.th, chananchida@sec.or.th, or ponwat@sec.or.th. The public hearing ends on 3 December 2023.

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