Thailand SEC Proposes Easing ICO Knowledge Tests Every 3 Months to Every 2 Years

Thailand's Securities and Exchange Commission (SEC) has proposed significant changes to its regulations governing initial coin offerings (ICOs), aiming to streamline the process for retail investors while enhancing risk management. The proposed amendments seek to reduce the frequency of knowledge tests for investors and introduce more stringent suitability assessments.

The current framework requires retail investors to pass a knowledge test every three months to participate in ICOs. The new proposal seeks to eliminate this repetitive testing requirement for investors who have already passed the test once. This change is designed to make the investment process more accessible and less burdensome for ordinary investors, who previously had to undergo quarterly assessments.

In addition to easing the knowledge test requirements, the SEC is proposing to implement mandatory suitability assessments for all retail investors. These assessments will evaluate whether an investor's risk tolerance aligns with the risk profile of the digital tokens they are considering. The suitability tests will be required every two years, replacing the current three-month interval. This shift aims to ensure that investors are better informed and protected from high-risk investments that may not suit their financial profiles.

The SEC's proposal also includes provisions for institutional and professional investors, who will remain exempt from these tests. This exemption is intended to balance the need for regulatory oversight with the recognition that experienced market participants are better equipped to manage investment risks.

The public comment period for these proposed changes is open until August 1, 2025. The SEC encourages stakeholders to provide feedback that could influence the final version of the regulations. The regulator's goal is to create a more efficient and compliant ICO framework that aligns with international standards while protecting retail investors from potential risks.

Jagdish Pandya, founder of Blockon Ventures and organizer of Thai Blockchain Week 2019, welcomed the proposed changes. He noted that the new knowledge and compliance tests would help prevent inexperienced investors from making impulsive decisions, thereby reducing the likelihood of fraudulent activities. Pandya also highlighted Thailand's leadership in the region, stating that the country's ICO platform sets a benchmark for legal fundraising, surpassing even some of the more developed markets in the region.

The proposed amendments reflect a thoughtful approach to regulatory reform, balancing the need for investor protection with the goal of fostering a more accessible and efficient ICO market. By reducing the burden on investors and platforms while enhancing risk management, Thailand's SEC aims to create a regulatory environment that supports innovation and protects investors.