New agency proposed to spur growth in fintech startups
BANGKOK (The Nation/ANN) - Regulators plan to offer financial and other privileges to aid the development of financial technology (fintech) startup ventures.
Elsewhere in the fast-moving technology sector, the regulators also say they will soon put in place clear rules aimed at protecting those who buy into international coin offerings (ICOs) and make other types of investments in cryptocurrencies.The Finance Ministry said it planned to create an institution for financial innovation and technology to provide financial support to fintech startups, along with other privileges.
Speaking at a fintech forum hosted by the Thai Fintech Association yesterday, Somchai Sujjapongse, permanent secretary for finance, said the ministry would this year propose to the Cabinet that the new institution to foster growth of fintech startups be set up, backed by investment of Bt500 million.
The proposed institution would select startups that have good ideas to develop new financial services. Those selected enterprises would be given training, advice and office space to work in, he said.Their products would be nurtured in an experimental sandbox regulated by the Bank of Thailand, the Securities and Exchange Commission (SEC) or other regulators. If they pass the experimental test, the startup founders would likely to get funding from venture capital or angel investors, Somchai said.
Regarding ICOs, Rapee Sucharitakul, secretary general of SEC, said that companies wanting to raise funds through this new mechanism were free to do so, as there were no regulatory barriers to his form of fundraising. However, the SEC would over the next two months put in place regulations to govern ICO activity. This will ensure that the interests of investors are protected, Rapee said.
The regulations would specify what type of companies can hold an ICO, and that such issuers need not be listed companies.Rapee said that ICO issuers must disclose accurate information to investors. They also have to make clear to investors what the raised funds would be used for.
As fundraisings via ICO involve cryptocurrencies, he said regulators need to introduce regulations that governed the use of these digital currencies.
Rapee said Finance Minister Apisak Tantivorawong had assigned the Finance Ministry, the SEC, the BOT and Anti Money Laundering Office to draft regulations concerning cryptocurrencies. This process was expected to be completed in the next three weeks, he said.
The BOT has voiced its concerns over the risks associated with cryptocurrencies and has sought cooperation from commercial banks to not engage in transactions involving them.
The central bank is worried about the prospect of financial fraud arising from an absence of regulations governing the digital currencies.
However, Rapee said institutions or investors could enter into transactions involving the virtual currencies.