Thailand’s SEC proposes allowing private funds to invest in cryptocurrencies

The regulator aims to make the local market more in line with global trends

10.10.2024 - 13:12

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What’s new? The Securities and Exchange Commission (SEC) of Thailand has proposed to allow private and mutual funds to invest in cryptocurrencies. This is how the regulator aims to increase the local market’s alignment with global trends and meet the growing demand for this asset type from institutional investors. At this stage, the initiative is published to gather public feedback.

SEC initiative

What else is known? The document proposes to allow securities and asset management firms to offer large investors investments in cryptocurrency exchange-traded funds (ETFs). This will enhance investors’ ability to diversify their portfolios under the guidance of expert managers, officials said.

The regulator noted that Thai investors can already access foreign crypto ETFs, but the mutual fund system introduced in 2015 has not kept pace with global changes.

The proposed rules would distinguish between high-risk assets, such as bitcoin, and stablecoins, such as USDT, designed to reflect the value of fiat currency.

The SEC emphasized that fund managers have a fiduciary duty to select appropriate investment channels and manage the associated risks.

The draft also outlines restrictions on the use of digital assets. Retail mutual funds will be able to invest up to 15% of their assets in cryptocurrencies, while funds for institutional investors have no limit, but the basket must include multiple assets.

The SEC’s proposal also includes recommendations for the temporary holding of cryptocurrencies, with the holding period limited to five business days for trading purposes.

Public comments on the proposal will be accepted until November 8, with final rules expected next year.

In April, Thailand’s SEC announced the blocking of unregistered crypto exchanges to combat crime.

In February, Thailand’s Ministry of Finance abolished VAT on cryptocurrency trading, noting that the move could provide the necessary impetus for further expansion of the digital asset market.

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