Finance Minister Arkhom Termpittayapaisith has asked the Securities and Exchange Commission (SEC) and the Bank of Thailand to examine any legal loopholes to prevent recurring cases of foreign exchange Ponzi schemes.
He said the case of the Forex-3D foreign exchange group, which allegedly cheated thousands of victims out of 2 billion baht, illuminates the legal loopholes that have to be reviewed.
Mr Arkhom added that neither the SEC nor the central bank have ignored the Forex-3D case, but rather have examined the legal aspects and alerted the public to the dangers.
However, the case is not under the SEC's powers as prescribed in Thai law.
Mr Arkhom said that if the Forex-3D group had conducted forex trading without the Finance Ministry's permission, it would be deemed illegal.
The minister also asked both the SEC and the central bank to examine if there were any legal loopholes in supervising non-banking institutions. He added that the ministry is in the process of revising regulations to improve its supervisory capacity.
In a statement issued yesterday, the SEC explained that it has no authority to supervise the foreign exchange sector.
The regulator currently supervises the stock exchange and the trading of corporate bonds and digital currency tokens, and monitors related businesses committing unfair practices according to the scope of powers and duties prescribed by the following laws: the Securities and Exchange Act, Derivatives Act, Royal Decree on the Business of Digital Assets, Provident Fund Act, Emergency Decree on Special Purpose Juristic Persons for the Securitisation of Assets, and the Trust Act for Transactions in Capital Market.
The SEC noted that the currency exchange law requires transactions of foreign currencies to be made with entities approved by the Finance Ministry. So far, no licence has been given to any individuals or legal entities which are not banks or finance companies to trade foreign currencies.
Once the SEC receives a whistle-blower complaint concerning dishonest behaviour of a person or a juristic person who is not a business operator under supervision, the SEC will list the names in the "Investor Alert" section on its website and the "SEC Check First" application, alongside using public relations to remind the public to use caution when making investments. The commission will also conduct an in-depth investigation into the facts when the matter is under the SEC's supervision.
