Exchange Control Regulations Online in Thailand

Forex trading is gaining traction in Thailand for a number of reasons. One of these is favorable regulation change. The economy of the country has become more welcoming to the Forex community in the past few years. This article will give an overview of the current situation and prospects for traders based in Thailand.

Change of Core Principles

To understand the regulatory landscape, it is essential to determine the major decision-makers. The country’s finance system is being developed under strict oversight from two state entities. These are the Bank of Thailand (BOT) and the Thai Securities and Exchange Commission.

Until 2017, Forex operations had been largely barred. Then, the Bank of Thailand started loosening its exchange controls. This opened new opportunities for Internet-assisted trades. Overall, the year became a turning point for the trading community.

The goal announced by the Bank of Thailand was to make transactions and hedging in foreign currencies possible for the private sector. The parties’ strategies are to be aligned with internal control and risk management policies. Meanwhile, BOT sets the framework for any such actions.

Key Documents and Conditions

Today, the main sources of regulation on the Thai territory are the Exchange Control Act and Ministerial Regulation No. 13. According to the documents, the Bank of Thailand is responsible for administering foreign exchange. Any transactions in foreign currency may go through two types of intermediaries. These are either commercial banks or entities classified as “authorized non-banks”.

The category includes change and transfer organizations, as well as other companies with a license from the Minister of Finance. Transactions that do not fall within the range are approved on a case-by-case basis. For authorized entities, there are no limitations on the purchase and sale of foreign currencies on the territory of the country.

Importantly, the government prohibits any speculation in the national money – the Thai baht ‎฿ (THB). However, other opportunities are plenty. There are no restrictions on the trading of major, minor, or even exotic currency pairs that do not include the currency. For instance, the most liquid EUR/USD, GBP/USD or AUD/USD are all accessible.

Currently, national legislation includes just one type of license for currency operations. This is known as the Authorized Juristic Person license. It is the only means of registration and regulation for a broker. Additionally, it is possible to trade through international providers.

What This Means for Forex

Forex traders are individuals who access the global market through online trading platforms. These are not viewed as qualified investors. In the past, they could only execute transactions through a Thai-based intermediary. Since the amendment of regulations, direct investment has also been possible.

The change in regulation attracted many international brokerages, such as FXTM Thailand among other brokers. Most online resources are now tailored to the needs of the local audience. To act lawfully, a broker registered abroad needs to be overseen by international regulatory bodies.

The maximum volume allowed per player annually is USD 200,000. Moreover, retail traders are free to invest in any destination country. Therefore, companies based abroad offer services to the locals lawfully. Global brokers translate their sites and platforms into the Thai language.

While operations are legal, traders may also use security tools to ensure the safety of data. These include virtual private networks and virtual private servers. The former encrypts the session and masks the real IP, thereby protecting data from third parties. The latter makes sure no data is lost due to technical glitches.

Such control entities include the Financial Conduct Authority (FCA) in the UK, the Securities and Exchange Commission (CySEC) in Cyprus, and the Australian Securities and Investment Commission (ASIC). Before trading in the live mode, clients should check their provider’s legal status.

Conclusion: Prospects of Trading

Today, Forex trading is increasingly popular in Thailand. The recent change of restrictions means retail traders may freely buy and sell other currencies via digital platforms. The most popular choices are Metatrader 4 and Metatrader 5. Some live accounts may be opened with as little as $50.

While the Thai baht is untradeable, there are many opportunities for profit. From stocks to derivatives to precious metals, online trading has a lot to offer to the Thai population. Overall, trading in the country is similar to trading elsewhere. The same fundamental principles and rules for consistent profits apply.