Financial Crime World

Thailand’s Financial Compliance Landscape: Best Practices to Navigate the Complex Regulatory Framework

Introduction

In a bid to maintain investor trust and prevent financial malpractices, Thailand has enacted a plethora of regulations governing various aspects of the country’s financial sector. Understanding these complexities is crucial for businesses operating in this market.

The Civil and Commercial Code: A Comprehensive Foundation

At the core of Thailand’s financial compliance framework lies the Civil and Commercial Code, which provides a comprehensive foundation for all business activities in the country. This code is supplemented by several key pieces of legislation, including:

  • Securities and Exchange Act B.E. 2535 (1992): Regulates securities and exchange transactions.
  • Financial Institution Act B.E. 2551 (2008): Governs financial institutions and their operations.
  • Payment System Act B.E. 2560 (2017): Regulates payment systems and electronic transactions.

Consumer Credit and Mortgages

In addition to general business regulations, specific laws govern consumer credit and mortgages in Thailand. Key legislation includes:

  • Credit Information Business Act B.E. 2545 (2002): Ensures lenders operate responsibly and transparently.
  • Consumer Protection Act B.E. 2522 (1979): Protects consumers from unfair business practices.
  • Security Business Act B.E. 2558 (2015): Provides a framework for mortgages.

Corporations

The following legislation governs corporate operations in Thailand:

  • Public Limited Companies Act B.E. 2535 (1992): Regulates public limited companies and their operations.
  • Foreign Business Act B.E. 2542 (1999): Governs foreign investment and business activities.
  • Investment Promotion Act B.E. 2520 (1977): Provides incentives for businesses that invest in the country.

Funds and Platforms

Thailand’s fund and platform regulations are overseen by the Securities and Exchange Commission. Key legislation includes:

  • Emergency Decree on Digital Asset Business B.E. 2561 (2018): Governs digital assets.
  • Ministerial Regulations - Approval for operation of securities business B.E. 2551 (2008).

Notification of Capital Market Supervisory Board

Several notifications issued by the Capital Market Supervisory Board provide detailed guidelines for specific types of funds and platforms, including:

  • Mutual funds
  • Property funds
  • Infrastructure funds
  • Carbon funds
  • Venture capital funds
  • Digital tokens
  • Crowdfunding systems
  • Social enterprises
  • SMEs

Derivatives Act and Other Key Legislation

The following legislation regulates derivatives transactions in Thailand:

  • Derivatives Act B.E. 2546 (2003): Regulates derivatives transactions.
  • Various notifications issued by the Securities and Exchange Commission provide guidelines for specific activities, such as trustee approval, sale of newly issued shares, and issuance of trust units of real estate investment trusts.

By understanding these key pieces of legislation and regulatory frameworks, businesses can navigate Thailand’s complex financial compliance landscape with confidence, ensuring that they operate in accordance with local laws and regulations.