Thailand's Securities and Exchange Commission (SEC) has proposed new regulations to allow mutual and private funds to invest in digital assets to align with global developments and address growing demand from institutional investors.
A draft proposal published on Wednesday seeks public comment on amendments to the requirements for investing in digital assets.
The SEC is proposing to allow securities firms and asset management firms to offer services to large investors who want to exchange crypto-related products such as exchange-traded funds. The regulator said it aims to align with global developments in digital assets and create more opportunities for investors to grow their portfolios under professional management.
It follows a surge in demand and international demand for US-listed Bitcoin and Ethereum ETFs, which were green overnight for trading in January and May.
The regulator said that while Thai investors can acquire crypto ETFs abroad, the current framework for mutual funds, which has been in effect since 2015, has not kept up with changes in digital asset investment abroad.
“It is appropriate for the SEC to adjust the requirements for accepting investments in digital assets consistent with international development,” reads a draft version of the proposal.
Proposed rules distinguish between high-risk assets like Bitcoin and stablecoins like Tether that are designed to maintain a fixed value.
Thailand's SEC has emphasized the need for fund managers to exercise a “fiduciary duty in selecting appropriate investment avenues” and to manage associated risks.
The draft outlines limits on digital asset exposure to various currencies. Retail mutual funds are limited to a 15% allocation in crypto investments, while more sophisticated funds face no limits on exposure to institutional and ultra-high-net-worth investors, although they must be diversified to manage risk.
The SEC proposal includes guidelines for the temporary holding of assets such as Bitcoin or Ethereum, which would include a holding period of five business days for trading purposes. “Money may be required to hold crypto assets to buy, sell or exchange digital assets,” the SEC said.
Public comments on the proposal will be accepted until November 8, with final regulations expected next year.
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