Thailand’s Securities and Exchange Commission (SEC) recently made a significant change to its regulations, allowing for the creation of private funds that can invest in spot Bitcoin exchange-traded funds (ETFs) traded on U.S. exchanges. This new opportunity is, however, limited to institutional investors and high-net-worth individuals.
The decision to permit asset management firms to oversee private funds investing in spot Bitcoin ETFs was made during a recent board meeting. The SEC Secretary-General, Pornanong Budsaratragoon, highlighted that this move was in line with the recent approval granted by the U.S. SEC. The SEC had been approached by asset management firms seeking exposure to digital assets, particularly Bitcoin and spot Bitcoin ETFs. However, careful consideration was needed due to the high-risk nature of such investments.
The regulatory framework for asset management firms did not initially include provisions for digital asset ETFs. Therefore, regulations had to be introduced to accommodate such investments. Asset managers, according to the SEC Act, were originally limited to trading services for classified securities. But after the approval of spot Bitcoin ETFs by the U.S. securities regulator, these financial products were reclassified as securities under Thai regulatory frameworks. This adjustment aimed to provide investment opportunities for institutional and high-net-worth investors.
Apart from permitting private funds to invest in spot Bitcoin ETFs, the SEC board also endorsed enhancements to stock market supervision and new listing regulations by the Stock Exchange of Thailand (SET). These measures were put in place to increase investor trust, promote long-term growth, oversee trading practices such as short selling, naked short selling, program trading, high-frequency trading, and stabilize stock price fluctuations.
Although the recent regulatory changes have opened up opportunities for institutional and high-net-worth investors, retail investors are still not granted access to spot Bitcoin ETFs in Thailand. The SEC has been closely monitoring developments but currently does not have a policy in place to allow for the establishment of spot Bitcoin ETFs in the country.
The decision by the Thailand SEC to permit private funds to invest in spot Bitcoin ETFs traded on U.S. exchanges marks a significant shift in the country’s financial landscape. While this opportunity is currently limited to institutional investors and high-net-worth individuals, it sets the stage for potential growth and diversification within the Thai market. The regulatory changes also aim to enhance investor trust and promote overall market stability in the long run.