Thailand SEC Proposes Crypto Investment Options for Mutual and Private Funds

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Insidebitcoin2024/10/10 19:40

By:Insidebitcoin

The Securities and Exchange Commission (SEC) in Thailand is taking steps to broaden cryptocurrency investment opportunities for mutual and private funds, aiming to support the country’s growing digital asset sector. The proposal, announced on October 9th , seeks to introduce regulatory frameworks that would enable these funds to allocate investments in digital assets such as investment tokens and exchange-traded funds (ETFs) listed on U.S. stock markets, according to a report from the Bangkok Post.

SEC Proposes New Framework for Mutual and Private Fund Crypto Investments

One of the primary aspects of the proposal involves treating “investment tokens” similarly to traditional securities like stocks and bonds due to their comparable levels of risk. This would enable asset managers and securities firms to create and offer new investment products to institutional clients and high-net-worth investors. However, there would be certain limitations for retail mutual funds, capping their exposure to digital assets at 15%. In contrast, institutional and high-net-worth investors would not face these restrictions, allowing for greater flexibility in their crypto-related investments.

Anek Yooyuen, the SEC’s deputy secretary-general, noted that additional criteria will be established later in the year to align the regulations for mutual and private funds handling digital assets. The proposed changes will address issues related to information disclosure and the safe custody of digital assets.

To manage varying levels of investment risk, the SEC plans to categorize digital assets according to their risk profile. For instance, high-risk assets such as Bitcoin will be governed by distinct guidelines, whereas stablecoins might be subject to a separate set of regulations. The regulatory body is open to receiving public comments on this proposal until November 8, 2024.

In conjunction with these developments, the SEC is also contemplating allowing initial coin offering (ICO) portals to outsource specific functions, such as fundraising or project design, if they lack the resources to handle these internally. This initiative, however, would require a public hearing before being implemented.

Despite these potential avenues for expanding crypto exposure, the SEC is also reinforcing certain regulatory measures to maintain market integrity. Stricter penalties are expected to be introduced for practices such as market manipulation and “naked short selling.” Penalties for improper trading orders issued by securities firms are set to increase from 1 million baht to 3 million baht, and firms involved in severe infractions could risk having their licenses suspended or revoked altogether.

These recent moves are part of a broader pro-crypto strategy that Thai regulators have been pursuing. Earlier in the year, the Thai cabinet approved a tax exemption on cryptocurrency earnings in an effort to make the country’s market more competitive on a global scale. In August, the SEC launched a Digital Asset Regulatory Sandbox, which allows ten private companies to test the exchange of digital tokens and cryptocurrency for Thai baht. The goal is to eventually create a legal framework for using cryptocurrencies as a method of payment. Although crypto payments are still restricted by the Bank of Thailand as of October 2024, discussions are ongoing between the SEC

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