Thailand SEC to Allow Crypto in Mutual, Private Funds

Thailand’s securities regulator has proposed to permit mutual and private funds to invest in cryptocurrency, the latest initiative to support the nation’s crypto economy

As reported by the Bangkok Post, the proposal cites an announcement from Thailand’s Securities and Exchange Commission on October 9th.

The announcement describes plans to allow funds to invest in crypto exchange-traded funds and investment tokens listed on U.S. stock exchanges.

Anek Yooyuen, the deputy secretary-general of the Securities and Exchange Commission (SEC), declared that “investment tokens” would be regarded as securities such as stocks and bonds due to their comparable risks.

The objective is to enable asset managers and securities firms to provide crypto products to large investors.

One critical provision is that retail mutual funds would be subject to a quota, restricting their crypto exposure to 15%. In contrast, institutional and high-net-worth investors would be exempt from such limitations.

Yooyuen further stated that the pertinent criteria would be revised later this year to accommodate digital asset management funds. He also mentioned that these modifications will encompass “information disclosure” and “asset custody.”

Additionally, the commission intends to implement distinct regulations contingent upon digital assets’ risk level. Stablecoins may adhere to a distinct set of regulations, while high-risk assets, such as Bitcoin, will be subject to specific guidelines.

The SEC is soliciting public feedback on the proposal until November 8, 2024.

Concurrently, the SEC will evaluate the feasibility of permitting initial coin offering portals to contract out certain duties, including fundraising or project design, in the event that they lack in-house capabilities, according to the report. Nevertheless, a public hearing would be conducted prior to the implementation of this measure.

Nevertheless, the SEC is enforcing its regulations by imposing more severe penalties for violations such as “naked short selling” and market manipulation, in addition to these new opportunities.

It is anticipated that the current 1 million baht fines for improper trading orders by securities firms will increase to 3 million baht. Firms that are found to have committed grievous offenses may also have their licenses revoked.

Thailand’s initiatives to promote cryptocurrency

Thailand’s regulators have implemented initiatives to cultivate an environment that is more conducive to cryptocurrency. In order to enhance Thailand’s global competitiveness, the Thai cabinet authorized a tax exemption for cryptocurrency revenues earlier this year.

The SEC established a Digital Asset Regulatory Sandbox in August, months later, to enable ten private firms to conduct trials for the exchange of digital tokens and cryptocurrency for Thai baht.

This initiative established the groundwork for the use of cryptocurrencies as a payment method.

The Bank of Thailand continues to prohibit crypto payments as of October 2024. However, the SEC intends to engage in further discussions with the central bank before implementing any changes.

Thailand also prohibits illicit crypto trading, and the commission has implemented measures to block unlicensed platforms in order to prevent local residents from accessing services.