Name
Global FinTech Guide
Country _ Name
Thailand
SectionTitle
Asset and portfolio management
Body
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.

Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.

Introduction

Attitude of the country towards modern asset and portfolio management services

Capital markets in Thailand are strictly regulated and controlled. According to the FTSE classification of markets as of September 2021, Thailand’s capital markets are ranked in tier 2, or the ‘advanced emerging’ group. However, the stringent regulations do not practically create barriers to asset management firms or investors, but they are aimed at enhancing investor protection.

Legal affairs

Obligations and requirements to provide asset and portfolio management, or ancillary services described above

Securities businesses are regulated by Thailand’s Securities and Exchange Commission (SEC), and their operators are required to obtain a securities license.

Type C securities licensees are allowed to undertake securities business in various categories, as follows: 

    a) mutual fund management;
    b) private fund management;
    c) securities brokerage of investment units, unit trusts (trust certificates) or trusts having similar characteristics to mutual funds, or any other securities prescribed by the SEC as securities with similar characteristics to investment units;
    d) securities brokerage of investment units, unit trusts (trust certificates) or trusts having similar characteristics to mutual funds, or any other securities prescribed by the SEC as securities with similar characteristics to investment units;
    e) underwriting of securities as specified in (c);
    f) investment advisory services; and
    g) venture capital management.

For a Type C license, the applicant must be a private or public company incorporated in Thailand, have paid-up registered capital of at least THB 100 million (approx. USD 2,924,575), and be free of reasonable grounds to believe that the applicant’s financial conditions are likely to cause damage, or any other circumstances indicating the applicant’s financial hardship. In addition, there must be no reasonable grounds to believe that the applicant has any deficiency or is not appropriate regarding control and sound business conduct. Finally, applicants must be able to maintain capital funds and set aside reserve capital in compliance with the laws establishing a legal entity, or the laws controlling the entity’s business undertakings.

The application fee for a Type C license is THB 30,000 (approx. USD 877) per application. The Type C license fee (annual fee) varies according to nature of the business. For instance, the license fee for mutual fund management business consists of (i) a mutual fund management fee at 0.01% of NAV per year, and (ii) a unit sales fee at 0.01% of the sale value of investment units per year; for private fund management businesses the license fee consists of a private fund management fee at 0.01% of the NAV per year.
/> There are no foreign direct investment limits or foreign ownership restrictions for a company that wishes to apply for a license.

Additional comments regarding the legal situation for asset and portfolio management services or what FinTech’s must be aware of in this business area

In 2021, the SEC introduced its “single form” to facilitate investment account opening by eliminating the need for investors to supply repetitive and redundant information on multiple forms. Instead, investors can fill in the necessary information only once upon opening an account to invest in any capital market product.

Economic conditions

Market size for asset and portfolio management services and biggest companies in this business area

According to the SEC’s 2020 annual report, in 2020, there were 23 asset management companies including one newcomer, AIA Asset Management (Thailand) Co., Ltd. Of this total, eight (8) asset management companies under commercial bank groups cumulatively accounted for a market share of 78%, a drop from 91% in the previous year. This reduction was partially caused by the merger between TMB Asset Management Co., Ltd. and Thanachart Fund Management Co., Ltd. under Eastspring Investment, which is an Asian region asset management company of Prudential Group.

The main sales channel remained branches of commercial banks, accounting for 59%, a 7% decrease from the previous year. Meanwhile, sales channels consisting of securities companies and asset management companies collectively grew from 31% in 2019 to 34% in 2020.

Additional comments regarding the economic situation for asset and portfolio management services or what FinTech’s must be aware of in this business area

Developed in response to the COVID-19 situation, the SEC’s Strategic Plan 2021-2023 focuses on achieving five goals for Thai capital markets: (1) recovery and strengthening; (2) sustainability; (3) accessibility; (4) competitiveness and connectivity; and (5) trust and confidence.

 

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