E. Key Findings and Follow up for TSD
General organization (Principle 1–3)
24. The legal basis for the TSD is generally sound and enforceable. The SEA and Tor.Thor
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32/2559, TSD Regulations Chapters 100–800, in conjunction with the relevant provisions of the Civil
Code and Commercial Code, provide for: enforceability of transactions; protection of customer
assets in the event of the bankruptcy of the depositor; immobilization and dematerialization of
securities; settlement finality; DVP for the settlement of securities transactions; and bankruptcy
remoteness of collateral. There's a high degree of certainty that the TSD regulations, procedures,
and contracts are enforceable in the Thai jurisdiction.
25. There is room to improve the legal framework to extend protection to the securities
balances of depositors and customers held in TSD's name in the event of its bankruptcy. There
is room to improve the legal framework in order to evidently afford protection to the securities
balances of participants and investors held in TSD's name, in the event of its bankruptcy. Under
section 225 of the SEA, when TSD accepts the deposit of securities, it records the securities balance
under its own name and holds such securities balances for the depositor or for any customer. The
fate of these securities balances and their protection and treatment under bankruptcy court
proceedings in the event of TSD going bankrupt would need to be established with greater clarity.
An expert legal review of the provisions in the SEA and other relevant laws covering the above
aspects should be undertaken and suitable amendments to the existing statutes may be carried out
based on the outcome of such a review." The TSD may also obtain expert legal opinion as to
whether the concept of netting has a sound statutory basis in the existent legal framework. Based on
such review, amendments may be introduced to provide a comprehensive statutory basis for
netting.
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