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SEC grants ThaiBMA right to test blockchain tech for trading bonds 

Dec 13. 2019
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By The Nation

At its monthly meeting on Wednesday (December 11), the SEC Board passed a resolution to grant a securities depository centre regulatory sandbox license to the Thai Bond Market Association (ThaiBMA) to test the use of distributed ledger technology (DLT) in facilitating faster issuance of bonds and increase efficiency of the bond market, according to press statement from the SEC.

The adoption of technology will shorten the issuance of bonds process and increase efficiency of overall market. Under the sandbox regime, ThaiBMA has set up a DLT-based bondholder data storage system, which will allow entities related to issuance and offering of bonds – i.e., investors, issuers, underwriters, registrars, depositories and regulators – to examine bond information more conveniently and rapidly while benefiting from less redundancy and a shorter timeframe for book closing process. 

ThaiBMA’s participation in this regulatory sandbox is expected to solve issues in corporate bond market. These includes the time-consuming process for verification of bondholders’ ownership and the lack of an interconnected data centre due to unconnected data systems of individual bond registrars. Such issues have caused delays and inefficiency in the bond issuance process. The real-time, live testing under the regulatory sandbox can be a protocol for further bond market development and other work processes in the capital market in the future. 

This regulatory sandbox is a major step forward and an important part of the implementation of DLT to support the Thai Capital Market Digital Infrastructure initiative . The initiative, spearheaded by the SEC, was officially launched on September 3 to increase efficiency, reduce costs, enhance transparency and strengthen competitiveness of business operators. In addition, investors and issuers will benefit from cost reduction and convenient access to capital market, says the statement.

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