February 28, B.E.2544 To Manager Commercial Banks* The Export and Import Bank of Thailand The Industrial Finance Corporation of Thailand Asia Credit Public Co.,Ltd. No.BOT.FOG.(14) C. 462/2544 Subject: Procedures of Thai Baht Speculative Prevention measures In Accordance with the Circular letter No.BOT.FOG.(13) C.3257/ B.E. 2543, Guidelines for Purchase of Foreign Currencies against Thai Baht from Non-Residents for same day settlement (value same day), dated November 27, B.E. 2543. There are some financial institutions that do not comply with this regulation in the right direction. Therefore, The Bank of Thailand would like to increase mutual understanding and to ensure proper practices in compliance with Thai Baht Speculative prevention measures. They are as follows: A. To Purchase of Foreign Currencies against Thai Baht from Non-Residents for Same Day Delivery (Value Same Day) and for Tomorrow Delivery (Value Tomorrow) 1. In case of having trade or investment related in Thailand as underlying transactions (With Underlying) 1.1 Non-Residents who are not natural persons such as juristic persons, institutions, mutual funds, corporations or financial institutions registered abroad 1.1.1 Financial institutions that want to purchase foreign currencies against Thai baht from non-residents have to send a letter for seeking approval to Financial Markets and Reserve Management Department, Financial Markets Operations Group, Bank of Thailand via facsimile at 356-7508. Evidence should be included with details of underlying transaction and term of money delivery for persons / local businesses before 16.30 hours in business day. Thus, Financial institutions should also inform their non-resident customers realize that cut-off time. 1.1.2 After the permission is granted, financial institutions have to monitor evidence of actual payment made to persons / local businesses regarding underlying transactions and send copies of evidence by facsimile to the Bank of Thailand within that day. 1.1.3 Financial institutions have to report those underlying transactions in Table 22, Report of Outstanding Balance of THB lending Transaction with Non-Resident (with Underlying). For value same day transactions, trade date, value date and maturity date (columns 5.2, 5.3 and 5.4), are the same date and financial institutions should report trade date and identify Type (column 7.1) of transaction as "SD" (same day). For value tomorrow transactions, trade date (column 5.2) is the transacted date, value and maturity dates (column 5.3 and 5.4) are the next date and financial institutions should identify Type (column 7.1) of transaction as "TM" (tomorrow). 1.2 Non-Residents as Natural Persons 1.2.1 To purchase of Foreign Currencies against Thai Baht less than The Bank of Thailand allows financial institutions make FX transactions without seeking approval. 1.2.2 To purchase of Foreign Currencies against Thai Baht more than 200,000 bahts but less than 5 million bahts per entity per day The Bank of Thailand allows financial institutions make FX transactions without seeking approval. Financial institutions, however, have to keep evidence of underlying transactions for purpose of monitoring by the Bank of Thailand for at least 3 years and are obligated to report such transactions as mentioned in 1.1.3 1.2.3 To purchase of Foreign Currencies against Thai Baht more than 5 million bahts but less than 50 million bahts per entity per day The Bank of Thailand allows financial institutions do FX transactions without seeking approval. After transactions are made, financial institutions have to submit evidence of underlying transactions to the Bank of Thailand via facsimile at 356-7508 immediatey and have to follow practices as mentioned in 1.1.2 and 1.1.3. 1.2.4 To purchase of Foreign Currencies against Thai Baht over 50 million bahts per entity perday Financial institutions have to send a letter for seeking approval from the Bank of Thailand and have to comply with 1.1.1, 1.1.2 and 1.1.3. 1.2.5 Definition fo "Per Entity" means transactions made between one natural person and all financial institutions in Thailand 2. In case of having without trade or investment in Thailand as underlying transactions (Without underlying) The Bank of Thailand shall not allow financial institutions to purchase foreign currencies against Thai baht from non-residents either for same day delivery (value same day) or for tomorrow delivery (value tomorrow). B. Thai Baht Direct Lending (Direct Loan) provided by Financial Institutions for Non-Residents. The Bank of Thailand does not encourage financial institutions to provide Thai baht direct lending (direct loan) for non-residents regardless either with underlying ro without underlying transactions and either with or without collateral. In addition, financial institutions are not allowed to make obligations by issuing letter of credit/letter of guarantee in term of baht for non-residents which, in effects, obligates financial institutions to pay baht to other entities on behalf of non-resident. Please be informed. And strictly compliance Sincerely yours, (Mr. Chetthavee Charoenpitaks) Assistant Governor Financial Markets Operations Group for GovernorExchange Control Division Financial Markets and Reserve Management Department Financial Markets Operations Group Tel: 283-5326-7 * BIBF is not included. -YK-