2. 2
Regulated
underlying
Non–regulated
underlying
Traditional
securities
offering
STO /
Asset Tokenization
Existing
securities
To be announced
by the SEC
Regulated Exempted
Digital
token
Cryptocurrency
Regulated Exempted
Securities
• The Securities and
Exchange Act
• The Emergency Decree on
the Specific Purpose Juristic
Person for Securitization
• The Trust for Transactions
in Capital Market Act
E-money / E-payment
The Payment Systems Act
Derivatives
The Derivatives Act
Digital assets
The Emergency Decree on
Digital Asset Businesses
Investment
token
Utility
token
Not ready-to-use
(B1)
Regulated
Ready-to-use
(B2)
Exempted
Others to be
announced
by the SEC
Asset
Tokenization
Digital tokens and laws
3. Type of
Tokens
Thailand Malaysia Hong Kong Germany
United
Kingdom
Security
Token
Securities – which type?
depends on the features
and characteristics)
Securities
✔
Securities
✔
Securities ✔
If investment
Fund – practically
no
If “specified
Investment” and
authorized
✔
Equity
Token
Shares (securities),
could be offered if
1. the SEA, as amended,
came into force in allowing
scripless
2. overcome restriction
under the CCC
3. overcome restriction
under the PLCA
Digital token
(Securities)
✔
Securities
✔
Securities
✔
If shares
(specified
Investment) and
authorized
✔
Debt
Token
Debentures
(securities)
could be offered if
the SEA, as amended,
came into force in allowing
scripless
Digital token
(securities)
✔
Securities
✔
Securities
✔
If debt
instrument
(specified
investment)
and authorized
✔
Global perspectives on digital tokens?
4. Type of Tokens Thailand Malaysia Hong Kong Germany
United
Kingdom
Investment
Token
Investment token
(one type of digital
token and
one type of digital asset)
Maybe, if
categorized as
“digital token”
May be securities;
Securities
✔
If “specified
investment” and
authorized
✔
Asset-backed
Token
Securities or Digital
Asset? depends on the
SEC policy
(could be offered,
depends on what type of
asset is being backed by
the tokens)
Maybe, if
categorized as
“digital token”
May be securities;
or structured
products or
commodities
Securities
✔
(If the token
represents direct
ownership in the
asset, then
depends).
If “specified
investment” and
authorized
✔
Global perspectives on tokens?
5. Utility
Token
Utility token (one type of
digital token and
one type of digital asset)
(could be offered
(exempt for ready-to-use
utility tokens))
Not legally
defined;
permitted, if
categorized as
“digital token”
May be securities;
or structured
products or
commodities
Unclear – mostly
unregulated
Generally
permitted
(unregulated)
✔
If e-money –
regulated
Cryptocurrency
Cryptocurrency (one
type of digital asset)
(could be offered - only
needs to comply with
digital token offering
requirements if they are
offered for fund raising
purpose)
Digital currency
✔
May be securities;
or structured
products or
commodities
Financial
instrument
(unit of account)
✔
Term not
defined;
(currently not
regulated)
✔
Type of Tokens Thailand Malaysia Hong Kong Germany
United
Kingdom
Global perspectives on tokens?
9. 3. Payment made into
REIT account
6. Investment
9
Asset Tokenization: Simplified transaction flows and case study
Asset
REIT
Underwriter
Trustee
holds ownership / leasehold in the properties
Registrar
Aspen REIT, Inc.
backed
by
Marketing
Platform
Asset
Management
Co.
Smart
Contract
and
Token
Tracking
acting
as FA
SEC
Traditional (REIT)
2. Offer trust
certificates of
REIT units to
underwriters for
public offering
1. File for
permission to
sell REIT units
7. Rent income
STO / Asset tokenization
Token
Holders
Issuer
18% ownership in
the asset
Case Study:
Asset
Management
4. Subscription
proceed
transferred to
the Trustee
5. REIT is established when the money
from the sale of trust certificates received by
Trustee and Trust Deed is executed.
Compliance / Regulatory &
Protocol Oversight
(Transaction Record-Keeping)
1. Offering & Trading
AML/KYC
2. Clearing & Settlement
3. Ongoing Compliance
Dividend
Communication & Disclosure
Risk management
Smart routing
Licensed DLT Exchange
Third Party (Templum)
Investor
(Holds units)
Allocation
Appointment
owns
Receive filing
from issuer
REIT
Manager
(Settlor)
10. Benefits and challenges
10
Efficiency in
value chain
Investment options
and liquidity
Faster clearing
and settlement
Compliance and
Supervision
Cyber threats
BENEFITS
CHALLENGES
Socioeconomic
Impact
Legal and Regulatory
issues
11. Legal and regulatory considerations
Laws and
regulations that
need to be
amended to allow
STO and asset
tokenization
Smart contract
and automation
VS
Contract law
Holistic legal
framework and
systems
• Interplay with other
laws
• e.g. payment law,
property law,
enforcement, etc.