New Thai SEC Rules for Crypto Investment in Funds

Thai SEC Proposes New Regulations for Funds to Invest in Digital Assets

The Thai Securities and Exchange Commission (SEC) has put forward a proposal for new regulations that would allow mutual and private funds to invest in digital assets. This move is aimed at keeping pace with international developments and meeting the growing demand from institutional investors.

Aligning with International Trends

The draft proposal, which was made public on Wednesday, seeks feedback from the public on revisions to the criteria for funds looking to invest in digital assets. The SEC aims to enable securities companies and asset management firms to provide services to large investors who are interested in diversifying into Crypto-related products like exchange-traded funds.

Meeting Investor Needs

According to the SEC, the proposed regulations are designed to align with global trends in digital assets and create more opportunities for investors to diversify their portfolios with expert management. This comes in the wake of increasing international interest and demand for US-listed Bitcoin and Ethereum exchange-traded funds that were approved for trading earlier this year.

Addressing Limitations in Current Framework

While Thai investors already have access to Crypto ETFs in foreign markets, the existing framework for mutual funds established in 2015 has not kept up with the changes in digital asset investing seen overseas. The SEC believes that adjusting the criteria for accepting Investments in digital assets is necessary to remain consistent with international Development.

Differentiating Between Assets

The proposed rules would distinguish between high-risk assets like Bitcoin and stablecoins such as Tether, which are designed to maintain a stable value. The SEC also emphasized the importance of fund managers exercising fiduciary duty in selecting appropriate Investment channels and managing associated risks.

Limits on Digital Asset Exposure

• Retail mutual funds would be restricted to a 15% allocation in Crypto Investments.
• More sophisticated funds for institutional and ultra-high-net-worth investors would have no cap on exposure but must diversify to manage risk effectively.

Guidelines for Asset Holding

The SEC's proposal includes guidelines for the temporary holding of assets like Bitcoin or Ethereum, setting a limit of five business days for trading purposes. Funds may need to hold Crypto Assets for buying, selling, or exchanging digital assets as needed.

Public Feedback and Future Regulations

Public comments on the proposal will be accepted until November 8, with final regulations expected to be implemented next year. This move by the Thai SEC signals a proactive approach to accommodating the evolving needs of investors in the digital asset space.