Control of Foreign Exchange (FOREX) Market Under Thai Law

Abstract

Nowadays, FOREX transactions have increasingly gained popularity simply because FOREX trading is available 24 hours a day and market analysis in the context of FOREX trading is easier than that transpiring in relation to stock trading in a stock exchange. Such actualities lead to investors’ greater interests in placing investments in the FOREX markets. However, in the absence of specific FOREX brokers in Thailand, investors have generally been driven to place investments through FOREX brokers overseas, who indeed fall outside the domestic jurisdiction of Thai laws. Amidst the lack of such legal jurisdiction, investors bear risks of loss arising from errors or corrupt practices of brokers, who also attempt to exclude or restrict liabilities. This article, therefore, seeks to provide a critical discussion of the problems surrounding the registration of FOREX brokers in Thailand as well as the determination of FOREX brokers’ duties and liabilities. In this connection, it analyses an appropriate system for the registration and accreditation of FOREX brokers and proposes agencies to be in charge of regulating FOREX brokers. In particular, this article gives an account of a desirable approach to the amendment to, or the introduction of, Thai legislation in order to be best able to handle problematical conduct affecting investors in the FOREX markets. For the purpose of the study, Thai laws are compared and contrasted with the laws of other jurisdictions, including the laws of the United States of America, the United Kingdom and Japan, with a view to arriving at practical solutions towards the preparation of draft legislation relating to FOREX transactions in Thailand.