New SEC Proposal: Mutual and Private Funds to Enter Digital Asset Market

New SEC Proposal – Thailand’s SEC Sets Limits on Digital Asset Exposure for Retail Funds

New SEC Proposal – The Thai Securities and Exchange Commission (SEC) has unveiled a draft proposal aimed at modernizing regulations to permit mutual and private funds to invest in digital assets. This initiative responds to the growing interest from institutional investors and aligns with international trends in the crypto space.

Key Highlights of the Proposal

Published on Wednesday, the proposal invites public feedback on adjusting criteria for funds investing in digital assets. The SEC’s plan allows securities companies and asset management firms to offer services tailored for large investors eager to diversify their portfolios with crypto-related products, including exchange-traded funds (ETFs).

This move comes amid rising global demand for US-listed Bitcoin and Ethereum ETFs, which gained approval for trading in January and May, respectively. The SEC recognizes that while Thai investors currently have access to crypto ETFs abroad, the existing mutual fund framework—established in 2015—has not adapted to changes in digital asset investing.

Differentiating Asset Types

The SEC’s proposal aims to delineate between high-risk assets like Bitcoin and stablecoins such as Tether, which are designed to maintain a stable value. The adjustments reflect the SEC Office’s commitment to align investment criteria with international developments in the digital asset landscape.

Guidelines for Fund Managers

Furthermore, the SEC emphasizes the importance of fiduciary duty among fund managers in selecting appropriate investment channels and managing associated risks. This focus aims to safeguard investors’ interests while navigating the complexities of the crypto market.

Exposure Limits for Funds

The draft also outlines specific limits on digital asset exposure for various types of funds. Retail mutual funds would be restricted to a 15% allocation in crypto investments. In contrast, more sophisticated funds catering to institutional and ultra-high-net-worth investors will face no cap on exposure, provided they diversify to manage risk effectively.

Temporary Holding Guidelines

Additionally, the SEC has proposed guidelines regarding the temporary holding of digital assets like Bitcoin and Ethereum. The proposed regulations cap the holding period to five business days for trading purposes, acknowledging that funds may need to hold crypto assets to buy, sell, or exchange them efficiently.

Public Feedback and Future Outlook

Public comments on this proposal will be accepted until November 8, with the final regulations anticipated to be released next year. As Thailand’s SEC seeks to modernize its framework, the proposed changes could significantly impact how institutional and retail investors engage with digital assets in the region.

In summary, the Thai SEC‘s proactive approach to regulating digital assets aims to create a robust framework that balances innovation and investor protection, positioning Thailand favorably in the evolving global crypto landscape.

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