28 July 2010

(Unofficial Translation)

Derivatives Act B.E. 2546
Bhumibol Adulyadej, Rex.,
_________

Given on the Day of 3rd July, B.E. 2546;
Being the 58th Year of the Present Reign

His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that:

Whereas it is expedient to enact a law governing transactionson derivatives,

Whereas this Act contains certain provisions relating to the restriction of rights and liberties of persons which Section 29, in conjunction with Section 35, Section 36, Section 39, Section 48, and Section 50 of the Constitution of the Kingdom of Thailand so permit by virtue of law;

Be it, therefore, enacted by His Majesty the King, by and with the advice and consent of the National Assembly,as follows

Section 1. This Act shall be called the “Derivatives Act B.E. 2546 (2003)”

Section 2. This Act shall come into force after one hundred and eighty days from the date of its publication in the Government Gazette.

Section 3. In this Act:
"goods" means securities, gold, crude oil, or any other property as specified in the notification of the SEC with the approval of the Cabinet, excluding currencies.

"variable" means any exchange rate, interest rate, financial index, securities index or any other variables as specified in the notification of the SEC with the approval of the Cabinet.

"derivatives" means a contract having one or any combination of the following characteristics:
(1) a contract in which one party is obliged to deliver goods as specified in the contract to the other party at a given time in the future, and the other party, in turn, is obliged to make payment for such goods at a price specified therein;
(2) a contract in which one party is obliged to make payment to the other party, or vice versa, in the amount which is equivalent to the difference between the price or value of goods or variable specified in the contract and the price or value of such goods or variable prevailing at a given time or period of time in the future as specified in the contract;
(3) a contract in which one party is entitled to demand the other party to deliver goods, or make payment for goods, or make payment in the amount which is equivalent to the difference between the price or value of goods or variable specified in the contract and the price or value of such goods or variable prevailing at a given time or period of time in the future as specified in the contract, or to demand the other party to enter into a contract under subsection (1) or (2).

"derivatives business" means the undertaking to provide services as the following :
(1) a derivatives broker;
(2) a derivatives dealer;
(3) a derivatives advisor;
(4) a derivatives fund manager;
(5) any other service providers relating to derivatives as specified in the notification of the SEC.

"derivatives broker" means any person who, in the ordinary course of business, engages or holds himself out to the general public as being ready to engage as an agent in the business of trading in derivatives with others, and has been licensed or registered under this Act, excluding those derivatives brokers with the characteristics as specified in the notification of the SEC.

"derivatives dealer" means any person who, in the ordinary course of business, holds himself out to the general public as being ready to engage as a counter party in a derivatives contract with any person who intends to trade in derivatives, by entering or offering to enter into such contract, and has been licensed or registered under this Act, excluding those who trade in or offered to trade in derivatives for their own accounts on any derivatives exchange licensed under this Act or those derivatives dealers with the characteristics as specified in the notification of the SEC.

"derivatives advisor" means any person who, in the ordinary course of business, gives advice to others, or holds himself out to the general public as being ready to give advice to others, whether directly or indirectly, concerning derivatives or advisability of trading in derivatives, and has been licensed or registered under this Act, excluding those persons whose giving of advice is solely a part of or an incidental to the conduct of business as a derivatives broker or a derivatives dealer, or any other persons who give advice in a manner as specified in the notification of the SEC.

"derivatives fund manager" means any person who, in the ordinary course of business, engages in the business of managing funds for others, or holds himself out to the general public as being ready to manage funds for others, with the intention of investing in derivatives for profit, and has been licensed or registered under this Act, excluding those derivatives fund managers with the characteristics as specified in the notification of the SEC.

"derivatives exchange" means any center or network through which derivatives trading is provided, in the ordinary course of business, whether by way of matching orders or arranging for counter parts, or by way of providing a trading facility for or facilitating those having intention to trade in derivatives to be able to agree upon or enter into a contract, and has been licensed or registered under this Act,excluding any center or network with the characteristics as specified in the notification of the SEC.

"derivatives clearing house" means any center or network where services for clearing and settlement of obligations under derivatives are provided as an ordinary course of business, and has been licensed or registered under this Act, excluding any center or network with the characteristics as specified in the notification of the SEC.

"trade in derivatives" means to enter into a derivatives contract.

"derivatives position" means an obligation or right of a person arising from derivatives trading.

"close out a derivatives position" means to discharge an obligation or terminate rights under derivatives an equal and opposite trade which results in an offsetting of the position or by any other means under the rules of a derivatives clearing house.

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This legislation has been prepared by staff of the SEC Office. But is and unofficial translation authorized for reprint by the SEC Office.