The Thai Securities and Exchange Commission (SEC) is set to implement significant changes to its regulatory framework, allowing mutual and private funds to invest more extensively in cryptocurrency. This move comes amid a growing interest in digital assets among Thai investors.
Key Changes in Investment Regulations
- Increased Investment Limits: The SEC will permit local funds managing high-net-worth individuals’ assets to invest up to 20% of their portfolios in cryptocurrencies. Previously, these funds were restricted to investing only through exchange-traded funds (ETFs) focused on crypto, with a maximum of 5% for retail investor-focused funds.
- Investment Tokens: The SEC will also categorize investment tokens similarly to traditional securities like stocks and bonds, allowing them to be included in mutual fund portfolios with the same investment ratios. This change aims to provide more investment alternatives while recognizing the similar risk profiles of these digital assets.
- Flexibility for Private Funds: Funds targeting wealthy investors will enjoy greater flexibility, with no upper limit on cryptocurrency investments. This is part of a broader strategy to enhance the appeal of digital assets within Thailand’s financial landscape2.
Regulatory Adjustments and Future Plans
- Trial Projects: The SEC plans to allow ten private firms to participate in a regulatory sandbox project aimed at exchanging digital tokens or cryptocurrencies for Thai baht. This initiative seeks to explore the viability of using cryptocurrencies as payment methods, which is currently prohibited by the Bank of Thailand.
- Public Hearing Requirement: Before these new regulations can be fully implemented, a public hearing will be conducted. This step is crucial for gathering feedback from stakeholders and ensuring transparency in the regulatory process.
- Increased Penalties for Violations: Alongside these changes, the SEC is considering stricter penalties for violations of its laws, particularly concerning practices like naked short selling. The maximum fine for securities firms sending inappropriate trading orders may rise from 1 million to 3 million baht, reflecting a commitment to maintaining market integrity.
Conclusion
The Thai SEC’s upcoming regulatory adjustments signify a pivotal shift towards integrating cryptocurrencies into traditional financial products. By allowing greater investment in digital assets through mutual and private funds, the SEC aims to cater to the evolving interests of investors while ensuring that adequate protections and frameworks are established. As these changes roll out, they could significantly reshape the landscape of cryptocurrency investment in Thailand, making it more accessible and appealing to a broader range of investors
