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SEC public hearing on draft regulations regarding information disclosure and risk warnings to clients of digital asset business operators



Tuesday 4 July 2023 | No. 112 / 2023


Bangkok, 4 July 2023 – The Securities and Exchange Commission (SEC) is seeking public comments on the principles and draft regulations on information disclosure and risk warnings to clients of digital asset business operators (“DA operators”). This is to accommodate the clients with information necessary for their service decision-making which includes potential risks relating to DA operators’ asset keeping and use of third-party digital asset custodians. 

Due to the reasons that digital assets are created by using blockchain and having unique storage methods, typically in digital wallets, together with recent news highlighted that many overseas DA operators had liquidity problems and risks exposure on their asset keeping, the SEC, on 30 December 2022, had therefore instructed DA operators to provide their clients with information disclosure and risk warnings regarding client asset keeping on their websites and applications.

The SEC views that digital asset investors should receive notifications in order to be aware of and able to use or store their digital assets safely. They should also have learnt about DA operators’ asset keeping for their risk assessment and service decision-making. In this regard, the SEC is proposing criteria on information disclosure and risk warnings on such issues to ensure consistency and proper conduct by DA operators. 

The essences are as follows:

(1) DA operators must disclose the risks on their financial condition appraisal, storage of clients’ assets, and clients’ risk management;

(2) DA operators must disclose information on the storage of digital assets with third-party custodians and list of sourced exchanges;

(3) Information disclosure and risk warnings, as stated in (1) and (2), must be disseminated through all official channels of DA operators, communicated this matter to all clients, and informed such information to new clients during the account opening process. Hence, such information must be accurate, complete, up-to-date, and clearly separated from other information. In case of significant revisions/updates, all clients must be informed accordingly.

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=918. (Thai version only) Stakeholders and interested parties are welcome to submit comments and suggestions via the website or email: wiranunt@sec.or.th or pitchal@sec.or.th. The public hearing ends on 3 August 2023. 

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Building Confidence in the Capital Market
NEWS
Securities and Exchange Commission
Corporate Communication and Investor Service Department
Tel. (66)2033-9502-5 E-mail: press@sec.or.th
No. 112 / 2023 Tuesday 4 July 2023
SEC public hearing on draft regulations regarding information disclosure and risk warnings to clients of digital asset business operators

Bangkok, 4 July 2023 – The Securities and Exchange Commission (SEC) is seeking public comments on the principles and draft regulations on information disclosure and risk warnings to clients of digital asset business operators (“DA operators”). This is to accommodate the clients with information necessary for their service decision-making which includes potential risks relating to DA operators’ asset keeping and use of third-party digital asset custodians. 

Due to the reasons that digital assets are created by using blockchain and having unique storage methods, typically in digital wallets, together with recent news highlighted that many overseas DA operators had liquidity problems and risks exposure on their asset keeping, the SEC, on 30 December 2022, had therefore instructed DA operators to provide their clients with information disclosure and risk warnings regarding client asset keeping on their websites and applications.

The SEC views that digital asset investors should receive notifications in order to be aware of and able to use or store their digital assets safely. They should also have learnt about DA operators’ asset keeping for their risk assessment and service decision-making. In this regard, the SEC is proposing criteria on information disclosure and risk warnings on such issues to ensure consistency and proper conduct by DA operators. 

The essences are as follows:

(1) DA operators must disclose the risks on their financial condition appraisal, storage of clients’ assets, and clients’ risk management;

(2) DA operators must disclose information on the storage of digital assets with third-party custodians and list of sourced exchanges;

(3) Information disclosure and risk warnings, as stated in (1) and (2), must be disseminated through all official channels of DA operators, communicated this matter to all clients, and informed such information to new clients during the account opening process. Hence, such information must be accurate, complete, up-to-date, and clearly separated from other information. In case of significant revisions/updates, all clients must be informed accordingly.

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=918. (Thai version only) Stakeholders and interested parties are welcome to submit comments and suggestions via the website or email: wiranunt@sec.or.th or pitchal@sec.or.th. The public hearing ends on 3 August 2023. 

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