Thailand’s SEC initiates new regulations for mutual and private funds to invest in crypto

Thailand’s Securities and Exchange Commission (SEC) has proposed new reforms to oversee the entrance of private investment funds and mutual funds into the crypto industry. The reforms indicate the Thai SEC’s intentions to keep up with the increasing institutional interest in crypto investments in other parts of the world. 

The regulator released a draft of the proposed regulations on Wednesday to seek public participation, opinions, and feedback. The public data will be collected, analyzed, and used as a cornerstone for implementing or revising the criteria for funds investing in cryptocurrencies.

The regulator’s draft highlights that the Thai SEC intends to allow asset management firms and registered securities companies to offer crypto investment services to larger players willing to tap into crypto assets through channels such as exchange-traded funds (ETFs).

Thai SEC proposes new reforms to govern crypto institution investments

The Thai SEC noted that Thai citizens could still access crypto ETFs registered outside the jurisdiction but highlighted that the current Thai regulatory setting established in 2015 does not consider digital assets. The draft expressed the Thai SEC’s intentions to amend the outdated regulatory framework and accept digital assets as investment vehicles to keep up with global developments.

The incoming regulations will classify digital assets such as Bitcoin as high-risk assets compared to less volatile crypto assets like stablecoins with a steady market value. The regulator advised fund managers to navigate the crypto industry with caution when selecting the best investment channels for their clients. 

The proposal also mentions the limits on digital asset exposure for each fund type. Retail mutual funds would have a limit of 15% allocated to crypto investments. Larger funds, referring to institutional and ultra-high-net-worth investors will not have any restrictions on the level of exposure, though they must manage risk through diversification. 

SEC will revisit regulations to authorize ICOs in Thailand

The draft also denotes that the Thai SEC will revisit regulations governing crypto custody, information disclosure, advertising, and value calculation. The body also plans to authorize initial coin offering (ICO) portals, which will be allowed to use outsourced companies for token fundraising or designing investment projects.

The proposal also spells out directives for the temporary holding of assets such as Bitcoin or Ethereum. Public participation in the drafted regulations will be open until November 8. The final regulations draft will be paraded next year after revisions and additions.

The proposal shows the financial watchdog aims to follow the global trends that have paved the way for institutional investors to explore the DeFi industry. The most recent and notable reforms happened in the United States when the U.S. SEC agreed to list Bitcoin and Ethereum exchange-traded funds. 

According to data from ETF tracking website Sosovalue, Bitcoin ETFs have witnessed a cumulative total net inflow of 18.68 billion as of October 9th. The total net assets under the custody of all U.S.-approved spot Bitcoin ETFs currently sit at $56.68 billion, accounting for 4.7% of Bitcoin’s total market capitalization. Ethereum spot ETFs have $6.62 billion in assets under custody, representing 2.33% of Ethereum’s total market value.