As a seasoned analyst with over two decades of experience in global financial markets, I’ve witnessed numerous paradigm shifts and transformations that have reshaped industries. The recent announcement by the Thai SEC to allow private funds and mutual funds to invest in crypto assets is yet another testament to this relentless march towards progress.
On a Wednesday announcement, the Thai Securities and Exchange Commission (SEC) unveiled new rules, empowering private and mutual funds to venture into cryptocurrency investments. This move is timely as the international crypto market expands and there’s growing institutional appetite for crypto ETFs across the globe.
The Thai Securities and Exchange Commission’s preliminary plan reveals that they are soliciting public opinion and aiming to revise standards for mutual funds to hold digital assets. Additionally, they are granting permission to financial management companies to provide their clients and major investors with the option to invest in cryptocurrency-related products. This encompasses investing in crypto exchange-traded funds (ETFs) listed on foreign exchanges like the US stock market.
In an interview with the Bank of Thailand, Anek Yooyuen, the deputy secretary-general of the Thai SEC, explained that investment tokens will be treated similarly to other tradable assets like stocks and bonds, as they share comparable risks and attributes due to their resemblance.
Additionally, these funds specifically targeting affluent investors will enjoy more leeway when it comes to investing in digital assets, with no limit set on their investment amounts.
According to Mr. Anek, the essential rules guiding the creation and operation of digital asset investment funds will be updated. These changes include improving methods for securing assets, calculating digital asset values, disclosing relevant information, and ensuring responsible marketing practices.
SEC Revamping Current Rules to Accommodate Crypto Investments
In simpler terms, the Thai Securities and Exchange Commission (SEC) has identified that the existing mutual fund framework and regulations have been unchanged since 2015 and require a significant overhaul. The proposed changes aim to adapt to the evolving landscape of digital asset investments globally, allowing investors access to international crypto exchange-traded funds (ETFs). Similar moves are being made by regulators in Taiwan as well, enabling investment in foreign crypto ETFs.
According to the proposed amendment, the Securities and Exchange Commission plans to modify the requirements for investing in digital assets, aligning them with global standards for asset development.
The suggested guidelines will distinguish between high-risk investments like Bitcoins (BTC: $60 990; 24h volatility: 1.8%; Market cap: $1.21 T; Vol. 24h: $28.65 B) and stable coins such as USDT ($1.00; 24h volatility: 0.1%; Market cap: $119.72 B; Vol. 24h: $39.91 B), etc. Moreover, the Thai SEC stresses that fund managers must exercise their duty of care in selecting suitable investment avenues while also managing related risks by exercising “fiduciary duty” when choosing appropriate investment channels.
The plan suggests setting boundaries for the involvement of digital assets across various investment fund categories. For retail mutual funds, a maximum of 15% can be invested in cryptocurrencies. However, institutional and ultra-high-net-worth investor funds would not have any cap, but they must diversify their investments to minimize risk.
Furthermore, the SEC’s proposal lays out rules for the short-term custody of cryptocurrencies such as Bitcoin and Ethereum. This rule restricts the holding period to a maximum of five business days when it comes to trading activities. The SEC explains that funds might be required to keep crypto assets in order to buy, sell, or swap digital assets.
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2024-10-10 14:16