SEC promotes new digital token trading system
The Securities and Exchange Commission (SEC) is progressing in its plans to introduce a trading system for digital tokens utilizing distributed ledger technology (DLT) to encourage securities firms to engage in digital token trading, along with advancing its supervision in the digital realm. Jomkwan Kongsakul, the deputy secretary-general of the SEC, mentioned the increasing popularity of token investments.
The SEC has given approval to four digital token projects and is currently evaluating two more, with a particular focus on green tokens and investment-oriented initiatives. Ms. Jomkwan emphasized that five other entities have been in initial discussions with the SEC, exploring opportunities for soft power tokens and innovative fundraising solutions related to green tokens.
Looking ahead, the SEC plans to allow securities companies to trade digital tokens to leverage their significant investor bases. Ms. Jomkwan highlighted the SEC’s commitment to enhancing market efficiency through technological means by fostering an electronic securities ecosystem. She mentioned forthcoming regulations aimed at promoting the issuance of electronic securities and online purchases of debentures, which currently involve a lengthy 7-14 day process before becoming available for secondary market trading.
Ms. Jomkwan pointed out existing issues around accessibility of products, high prices, and illiquidity in the current bond trading system, both for investors and issuers who struggle with manual data and paperwork errors, leading to delays. By harnessing advanced technology, the SEC aims to streamline processes, eliminating market barriers and enhancing accuracy.
To propel the capital market into the digital age, the SEC is primed to introduce DLT to revolutionize the bond trading system encompassing primary and secondary markets for activities like settlement, trading, investor registration, and return payments. Furthermore, the SEC ensures fair competition where firms with their DLT infrastructure can establish independent chains, maintaining compatibility under a unified standard, or utilize the SEC’s public chain at a reasonable cost if lacking their chain.
Ms. Jomkwan hinted at the possibility of multiple chains for trade in the future, all connected via a shared ledger anchored in DLT to expedite trading processes. She delineated two categories of securities issuance, emphasizing the coexistence of traditional securities alongside digitally native products born from DLT for efficient trading. Fractional trading with reduced prices and heightened liquidity allows for real-time trading, more market players, and decreased settlement issues.
Additionally, the SEC is developing the SEC Open API data platform for all listed companies to enable investors to analyze and make informed investment decisions. The platform aims to enhance transparency and accessibility to crucial information for investors.