The Thai Securities and Exchange Commission (SEC) released new regulations on Wednesday allowing mutual and private funds to invest in digital assets. The proposed rules aim to respond to growing international interest and demand for cryptocurrency-related products. They seek to provide more investment opportunities for large institutional investors while ensuring proper risk management.
Thai SEC Proposes New Rules to Allow Institutional Investment in Crypto ETFs
The SEC’s proposal for the change of rules includes the following major modifications of the current rules regarding fund investing in digital assets. One would be to let securities companies and asset management firms provide services to institutional investors to allow them to invest in related products like ETFs. This comes from an increase in demand for cryptocurrency investment worldwide, especially after the approval of Bitcoin and Ethereum in the US this year.
The SEC proposed rules are intended to open up more investment possibilities. In addition, they ensure that fund managers are properly motivated. They stress the need to consider the principle of due diligence when choosing investments and dealing with risks. The proposal distinguishes high-risk cryptocurrencies, namely Bitcoin, and more stable assets, such as Tether, a type of stablecoin.
Thai SEC Plans Crypto Investment Limits and Diversification for Funds
The SEC has placed caps on digital asset investments for different funds to mitigate risks. Retail mutual funds can invest up to 15% of their digital assets, with more advanced mutual funds focused on institutional investors having no restrictions as long as they are well diversified. This is to mitigate the effect of potential losses of high-risk assets.
Another proposal component is the short-term storage of digital assets such as Bitcoin and Ethereum. The SEC proposes that funds could hold these assets for up to five business days for trading purposes. This allows them to buy, sell, or exchange digital assets without long-term exposure.
These proposed rules are still open to the public, with the comment period closing on November 8. Final regulations are anticipated to be put in place during the next year. These changes represent a big leap in Thailand’s attempt to adapt to the global cryptocurrency market. On the other hand, they ensure that the country’s financial system remains stable and secure for investors.
