The Thai Securities and Exchange Commission (SEC) is making strides towards allowing mutual and private funds to invest in digital assets, aligning with global trends and catering to the increasing interest from institutional investors. The proposed regulations aim to update the criteria for funds investing in digital assets, opening up opportunities for securities companies and asset management firms to offer services to large investors looking to diversify into crypto-related products like exchange-traded funds.
This move by the SEC comes in response to the growing demand for US-listed Bitcoin and Ethereum ETFs, which have gained traction in the market. While Thai investors currently have access to crypto ETFs abroad, the existing framework for mutual funds in the country has not kept pace with the evolving landscape of digital asset investments globally.
The proposed rules would distinguish between high-risk assets like Bitcoin and stablecoins such as Tether, with an emphasis on the need for fund managers to exercise fiduciary duty in selecting appropriate investment channels and managing associated risks. The draft also outlines limits on digital asset exposure for different types of funds, with retail mutual funds capped at a 15% allocation in crypto investments and more sophisticated funds for institutional and ultra-high-net-worth investors facing no exposure limits but required to diversify to mitigate risk.
Additionally, the SEC’s proposal includes guidelines for the temporary holding of assets like Bitcoin and Ethereum, restricting the holding period to five business days for trading purposes. Public feedback on the proposal is being sought until November 8, with final regulations expected to be implemented next year.
This proactive approach by the Thai SEC not only reflects the regulator’s commitment to staying abreast of international developments in digital assets but also aims to create more opportunities for investors to diversify their portfolios under expert management. As the world of digital assets continues to evolve, these proposed regulations could pave the way for a more inclusive and dynamic investment landscape in Thailand.