THAILAND LAW AND PRACTICE Contributed by: Wongsakrit Khajangson, Panupan Udomsuvannakul, Koraphot Jirachocksubsin and Pitchaya Roongroajsataporn, Chandler Mori Hamad a
are required to use innovative technologies such as smart contracts and AI to enhance their services. The sandbox supports six types of digital asset services, namely, digital asset exchanges, digital asset brokers, digital asset dealers, digital asset fund managers, digi - tal asset advisers and digital asset custodial wallet The Office of Insurance Commission (OIC) issued a notification on insurance regulatory sandboxes in 2019, allowing both life and non-life insurance indus - try operators to conduct testing in their own sand - boxes for certain cases. 2.6 Jurisdiction of Regulators The jurisdiction of each regulator depends on the type of financial service provided rather than the type of technology the operator of such business adopts. The key regulators of fintech businesses concerning finan - cial services, securities and insurance in Thailand are: • the MOF and the BOT for financial services; • the MOF and the SEC for securities; • the OIC for insurance; • the Electronic Transactions Development Agency (ETDA); and • the Anti-Money Laundering Office (AMLO). providers. Insurance The BOT has the power to supervise, examine and analyse the financial status, performance and risk management systems of financial institutions to enhance the stability of Thailand’s financial status as a whole. Thus, the BOT will predominantly supervise fin - tech activities relating to financial institutions, includ - ing digital lending and peer-to-peer lending payment systems, e-wallets, e-money and e-payments (includ - ing designated payment systems and designated pay - ment services under the Payment Systems Act). The SEC is the regulatory unit supervising capital mar - kets. Capital markets are the main mechanisms for efficient mobilisation, allocation and monitoring of the utilisation of Thailand’s economic resources. The SEC also governs businesses that crowdfund, including those in the digital asset industry (cryptocurrencies and digital tokens), and administers the Digital Asset Regulatory Sandbox.
The ETDA oversees digital platform and e-transaction standards and supports the forthcoming Platform Economy Act framework. The AMLO is Thailand’s regulatory body overseeing financial transparency and compliance with anti-mon - ey laundering and counter-terrorism financing regula - tions. It monitors both traditional and digital transac - tions to prevent money laundering and financial crimes (including oversight of specified operators’ customer due diligence/reporting obligations under the AML Act (see 2.14 Impact of AML and Sanctions Rules )). 2.7 No-Action Letters In Thailand, the SEC has not officially adopted the concept of no-action letters used in the United States. However, the SEC can provide legal advice and guid - ance to companies and individuals to help them com - ply with SEC regulations and conduct activities involv - ing SEC regulations with confidence. 2.8 Outsourcing of Regulated Functions The outsourcing restrictions applicable to each type of business depend on the relevant regulations. Thus, different businesses may have different restrictions on outsourcing. Business operators that conduct desig - nated business activities under the relevant regula - tions must obtain licences or approvals, or register with the appropriate authorities. Certain functions in the operations of such designated business that are not the main activities under the respective licence, approval or registration can be outsourced to quali - fied persons to the extent that such outsourcing is not done to circumvent the relevant requirements. For example, financial institutions can use IT out - sourcing services provided by third parties. However, the guidelines on risk management implementation of third parties must be followed. The guidelines cover risk governance, third-party risk management and reporting obligations to the BOT. Regulations require that payment service providers, such as e-money or e-payment service providers, have protocols for third-party services as follows: • risk management measures and regular assess - ments for outsourced services;
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