Thailand's Securities and Exchange Commission ("SEC") recently issued notifications to recognise sustainability-related tokens as a sub-type of digital token – which is considered a digital asset alongside cryptocurrency under the Emergency Decree on Digital Asset Businesses B.E. 2561 (2017). These notifications became effective on 1 June 2024.
Sustainability-related tokens are categorised into four sub-types, pursuant to how the funds received from the token offering are utilised:
- Green token: to invest in projects that promote environmental sustainability;
- Social token: to invest in projects that promote social development;
- Sustainability token: to invest in projects that promote both environmental sustainability and social development; and
- Sustainability-linked token: to proceed in activities that promote sustainability. This type of token may involve adjustable returns based on the performance of the issuer, its affiliates or specific projects in meeting the sustainability-related goals.
Requirements for Sustainability-Related Token Offering
The general requirements for digital token offerings also apply to public offerings of sustainability-related tokens. They are as follows:
- the offering must be approved by SEC;
- the registration statements and the draft prospectus must be filed with SEC before marketing and offering the digital token to the public; and
- the digital token shall be offered through an initial coin offering (ICO) portal approved by the SEC.
In addition to the general requirements for digital token offerings, issuers of sustainability-related tokens shall also be required to disclose certain sustainability information, such as the use of proceeds, project evaluation process, details on adjustable rate of return, etc. The project must also be reviewed and certified by an external independent evaluator.
As an incentive to the proponents of sustainability projects, issuers of sustainability-related tokens shall be exempted from certain fees relating to the public offering, including the application fee and the fee for filing registration statements and draft prospectuses. Initially, this fee exemption will be extended to issuers who submit the token offering application within 31 May 2025.
