Thailand’s Securities and Exchange Commission (SEC) is considering changes allowing mutual and private funds to invest in cryptocurrency products. This move aims to meet the growing demand from institutional investors who are looking for more exposure to digital assets.
Under the proposal made by the SEC on October 9, funds would be allowed to invest more in cryptocurrency exchange-traded funds (ETFs) that are traded and listed on U.S. stock exchanges. The changes would enable securities companies and asset management firms to offer crypto-related products, mostly to large, high-net-worth investors rather than regular retail investors.
The SEC’s proposal also covers “investment tokens,” which would be treated similarly to traditional financial securities like stocks and bonds. SEC Deputy Secretary-General Anek Yooyuen explained that these tokens share similar risks and characteristics with other transferable securities, justifying their inclusion in investment portfolios.
However, not all crypto assets will be treated the same. For example, high-risk assets like Bitcoin will have stricter rules compared to stablecoins. Retail investors will face a 15% cap on how much of their mutual fund investments can be allocated to cryptocurrencies. On the other hand, institutional and wealthy investors will not face any limits on their exposure to crypto products.
In addition to expanding investment opportunities, the SEC is also planning to revise rules for managing funds that invest in crypto assets. This will include stricter regulations on asset custody, value calculation, information disclosure, and advertising. The SEC is looking to ensure that these funds are managed responsibly while also offering protection to investors.
The regulator also has plans to authorize initial coin offering (ICO) portals. These portals would be allowed to work with outsourced companies for fundraising or designing investment projects. This could make it easier for startups and other projects to raise capital through ICOs.
At the same time, the SEC is cracking down on inappropriate trading practices. It plans to increase fines for activities such as "naked short-selling" and market manipulation. Earlier this year, the regulator shut down unlicensed crypto exchanges that were operating illegally in the country.
To further promote innovation, the SEC is also preparing a Digital Asset Regulatory Sandbox. This initiative would allow ten private firms to conduct trial projects involving the exchange of crypto assets for local currency. However, using crypto as a form of payment is still illegal in Thailand, and the SEC will need approval from the country’s central bank to make any changes to this rule.
