SEC considers banning NVDR securities for Thai investors

With plans to limit Thai investors from making investments in non-voting depository receipts (NVDRs), the Securities and Exchange Commission (SEC) is setting up a public hearing to enforce a ban on securities companies offering such services. Citing concerns over NVDR securities as a mechanism to sidestep compliance with regulations or as a means to obscure shareholding data, the SEC believes these circumstances could potentially lead to inappropriate conduct within the capital market.

This lack of transparency could also leave investors without crucial information that could impact their investment decisions, the SEC said.

“An improvement in the criteria for offering NVDR transaction services is deemed necessary by the SEC. We are prepared to consider the perspectives of those affected.”

Initially, securities firms will be barred from accepting purchase orders, receiving transfers or exchanging securities that result in an increase in NVDR securities for Thai investors.

In cases where securities firms have clients that are foreign securities companies, they will also not be permitted to accept orders, receive transfers or exchange securities. The public hearing by the SEC is set to be carried out until February 6 on the SEC website, reported Bangkok Post.

Parallel to this, the SEC is also orchestrating a public hearing on the enhancement of governance principles for digital token holders’ benefits to amplify confidence in both fundraising and investments in digital tokens. The SEC board has approved the enhanced principles governing the sale of digital tokens to the public or initial coin offerings (ICOs) to ensure that sufficient and appropriate mechanisms are in place to safeguard investors’ rights.

Fundraising, investment

The regulator strives to inspire digital token issuers to take responsibility for token holders, thereby boosting confidence in both fundraising and investment in ICOs. The improved criteria include requirements for issuers to have a checks and balances mechanism to safeguard the rights of digital token holders and measures to prevent and manage conflicts of interest.

The stipulation outlines matters that need to be resolved by the issuer’s board of directors, ensuring the board is jointly responsible for decision-making and sharing information related to digital token issuance. There is also a requirement for ICO advertising to comply with additional criteria.

This includes avoiding rushing investors into making investment decisions, not promising or guaranteeing returns, offering suitable warnings about investment risks, and identifying reliable and clear sources of information in addition to promotional materials.

Furthermore, the regulator stated that the deduction of advertising expenses for digital tokens must align with relevant criteria. The hearing on these principles is scheduled to take place until February 6.