WISE RECAP - CAPITAL MARKETS REGULATORY UPDATES FOR Q2/2025

Highlights

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In these series of quarterly regulatory updates, Wise Equity Legal Counsel Limited aims to bring to your attention key developments of the relevant rules and regulations in the Thai capital markets and digital asset landscape. Here is our recap for the second quarter of 2025: –

1. Amendment of regulation regarding the qualifications of private funds to align with the definition of institutional investor

The Securities and Exchange Commission (the “SEC”) has issued the Notification No. Kor Jor 2/2568 Re: Determination of Definitions of Institutional Investor, Ultra-High Net Worth Investor and High Net Worth Investor, effective on 1 May 2025, which revises the qualifications of private funds under the definition of institutional investor to enhance flexibility for business operations while maintaining an appropriate level of investor protection. 

Previously, the definition of institutional investor was determined by assessing the qualifications of the underlying investors. Specifically, the underlying investor was required either to qualify as an institutional investor according to Clause 5 of the SEC Notification No. Kor Jor. 39/2564 or demonstrate a financial position equivalent to that of an ultra high net worth or high net worth investor.

Under the amended rules, private funds can now be recognized as institutional investors without requiring prior assessment of the qualifications of the underlying investors. This approach is based on the fact that private funds are managed by licensed securities business operators under the SEC’s supervision, and these operators are professionals, with necessary knowledge and expertise, to carry on the operations of the private funds. Furthermore, these licensed operators bear the responsibility for classifying investors and managing investments in accordance with the appropriate client’s category.

2. Amendment of regulations related to classification of net capital bonds (the “NC Bonds”) as high-risk or complex capital market products

The Office of the Securities and Exchange Commission (the “SEC Office”) has issued the Notification No. Sor Thor 16/2568 Re: Rules in Details related to Communication and Investor Service Provision for Securities Companies and Derivatives Business Operators, along with other related notification issued by the Capital Market Supervisory Board. These notifications will take effect on 16 April 2025 and are intended to enhance regulatory standards governing how securities companies communicate and provide services to clients, particularly in relation to the offering of high-risk or complex capital market products. The amended rules now explicitly include and cover the offering of and the provision of related services for NC Bonds.

Under this amendment, NC Bonds are classified as high-risk or complex capital market products. Therefore, any offering of NC Bonds must comply with the requirements applicable to such products. These requirements include, among others, providing clients with clear and sufficient information to help them understand the nature and risks of the instruments, delivering appropriate risk warnings, and requiring clients to pass a knowledge test before making their first investment in NC Bonds redeemable upon the dissolution of the issuing company.

3. Amendment of regulations related to advertising and promotional activities of digital asset business operators and customer referral practices

The SEC Office has issued the Notification No. Sor Thor 10/2568 Re: Rules on Details of Advertisement and Promotion of Digital Asset Business Operators and the Notification of Guidelines No. Nor Por. 2/2568 Re: Guidelines on the Details of the Arrangement for a Person Handling Customer Referral Lists for the Provision of Services Related to Digital Tokens, Advertising, and Sales Promotion by Digital Asset Business Operators, both effective on 16 April 2025. These notifications aim to enhance the effectiveness of digital asset advertisements distributed by digital asset business operators. The regulations require that such advertisements provide appropriate risk warnings and present information clearly, appropriately, and accurately to enable investors to make well-informed investment decisions. The amendments further seek to balance investor protection with the flexibility needed for digital asset business operators to maintain practices consistent with current industry standards. The key amendments are as follows:

1. The size of the warning text must be appropriate and consistent with the nature and format of actual advertising practices to ensure sufficient investor awareness.
2. The requirement for digital asset business operators to display warning messages at all times during advertising has been removed as the current principle-based criteria are considered adequate and aligned with the standards for securities advertising.
3. The warning texts for advertisements of both cryptocurrency and digital token products are standardized into a single pattern, which must display the warning texts in the most stringent way possible. This revision aligns with the current practice of digital asset business operators in publishing such warnings.
4. Advertisements via social media must also comply with the amended principles outlined in points (1) to (3) above.

At the same time, the SEC Office has updated detailed guidelines on the arrangement for a person handling customer referral lists for the provision of services in relation to digital token, advertising, and sales promotion by digital asset business operators, so that such business operators can comply with the intention of the specified criteria correctly and appropriately, as well as conducting advertising and promotional activities responsibly.

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For more in-depth information on any of the above, please reach out to Karinevidch Olivero at karinevidch.o@wiseequitylegal.com or Noraseth Ohpanayikool at noraseth.o@wiseequitylegal.com or Yanika Apisaksirikul at yanika.a@wiseequitylegal.com