Thai SEC floats allowing crypto products in mutual, private funds

Thailand’s Securities and Exchange Commission is proposing to allow mutual and private funds to invest in crypto products, addressing growing interest from institutional investors.

An Oct. 9 proposal from the finance regulator stated that funds would be allowed to invest more in crypto exchange-traded funds (ETFs) traded and listed on United States stock exchanges.

The proposal would allow securities companies and asset management firms to offer crypto-related products to large investors.

“Investment tokens” will be included with the same investment ratios as transferable securities such as stocks and bonds “because they have similar characteristics and risks,” said SEC deputy secretary-general Anek Yooyuen told the Bangkok Post.

“Relevant criteria will be revised to support the establishment and management of funds investing in digital assets,” he added. 

However, there will be different rules proposed for various types of digital assets with high-risk assets like Bitcoin (BTC) being treated differently from stablecoins.

There would also be restrictions with retail mutual funds limited to a 15% allocation in crypto investments, while institutional and high-net-worth investors would have no cap on exposure.

The SEC will also revise the criteria for managing funds investing in crypto assets, including asset custody, value calculation, information disclosure, and advertising.

It also plans to authorize initial coin offering (ICO) portals which will be allowed to use outsourced companies for token fundraising or designing investment projects.

However, the regulator plans to hike the fines for “naked short-selling,” firms sending inappropriate trading orders, and market manipulation. Earlier this year, the SEC blocked unlicensed crypto exchanges from operating in the country. 

Related: Kasikornbank launches first licensed Thai digital asset custodian

The SEC is also preparing a Digital Asset Regulatory Sandbox, which would involve ten private firms conducting trial projects for exchanging crypto assets for local currency. 

This could open the doors for crypto payments in the country, a practice currently outlawed by Thailand’s central bank. The SEC needs to discuss and seek approval from the Bank of Thailand regarding using crypto as a means of payment.

Retail crypto trading in Thailand remains popular, with its largest crypto exchange, Bitkub, seeing almost $30 million in daily volume, according to CoinGecko. 

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