The Business Security Act – Personal Property Security Interests

On 7 August 2015 the National Legislative Assembly (NLA) approved new legislation called the Business Security Act (BSA), which will come into force in July. The BSA is intended to provide Thailand with a form of personal property security interest and improve access to credit for the country's 2.8 million small and medium-sized enterprises (SMEs). We discuss the BSA in more detail here. Ministry of Commerce has issued a notification regarding rules, methods and condition for application, renewal and replacement of a security enforcer license (the "Security Enforcer Notification").

The Security Enforcer Notification was published in the Royal Gazette and effective on May 13, 2016. The Security Enforcer Notification provides that the following persons are eligible to apply for a security enforcer license:

1. qualified licensed auditor holding a Thai CPA license for no less than three consecutive years;
2. qualified licensed lawyer holding a Thai lawyer license for no less than three consecutive years; and
3. any person whose duties are related to the enforcement of security and who has been licensed, approved or registered for a continuous period of no less than three consecutive years by/with a government agency or registered association or under the applicable law as follows:

(a) an arbitrator registered with the Office of the Judiciary;

(b) a court expert in the field of asset valuation registered with the Office of the Judiciary;

(c) a planner or plan administrator registered with the Legal Execution Department;

(d) an assessor who is a main assessor approved by the Office of the Securities and Exchange Commission, or a qualified main valuer approved by the Thai Valuers Association or the Valuers Association of Thailand.

The applicant for a security enforcer license is also required to attend courses provided by the Department of Business Development (DBD) (i.e., 6 hours of security business act related and 6 hours of security enforcer ethics related) in order to qualify to obtain the security enforcer license. The DBD will start accepting applications for the license in June 2016 and will also provide the first two courses for 100 applicants in June of 2016.

The security enforcer license is valid for three years and can be renewed by submitting an application to the DBD.

The Business Security Act requires that all business security contracts must specify details of and remuneration for the security enforcer upon the registration of the business security contract. Any enforcement of "business", which is registered as security, can only be done by an authorized security enforcer.