Thai SEC Opens Doors to Private Funds for Spot Bitcoin ETFs, But There’s a Catch

Thailand’s Securities and Exchange Commission (SEC) has changed its regulations, permitting the creation of private funds that invest in spot Bitcoin exchange-traded funds (ETFs) traded on U.S. exchanges.

However, this opportunity is limited to institutional investors and high-net-worth individuals.

SEC Amends Spot Bitcoin ETF Rules

SEC Secretary-General Pornanong Budsaratragoon disclosed that the decision was reached during last week’s board meeting. The approval grants asset management firms the authority to oversee private funds dedicated to investing in spot Bitcoin ETFs traded on U.S. exchanges, in line with the recent approval granted by the U.S. SEC.

“Asset management firms asked the SEC for them to have exposure in digital assets, especially Bitcoin and spot Bitcoin ETFs, but we need to consider carefully whether to allow asset management firms to invest in digital assets directly due to the high risk,” Ms Pornanong told the post.

The regulatory framework overseeing the investments of asset management firms initially did not encompass digital asset ETFs, prompting the SEC to introduce regulations to facilitate such investments. Additionally, per the SEC Act, asset managers are constrained to trading services for securities classified as securities.

Nevertheless, after the U.S. securities regulator approved spot Bitcoin ETFs in January, the shares in these financial products were reclassified as securities instead of cryptocurrency assets under Thai regulatory frameworks.

This adjustment aims to unlock investment avenues for asset management firms and their clientele despite being restricted to institutional and high-net-worth investors.

Stock Market Enhancements

Ms. Pornanong also mentioned that the SEC board had endorsed enhancements to stock market supervision and new listing regulations by the Stock Exchange of Thailand (SET).

These changes aim to increase investor trust in the Thai market and promote the long-term growth of the exchange. The measures include oversight of short selling, naked short selling, program trading, high-frequency trading, and measures to stabilize stock price fluctuations.

In January, the Thailand SEC prohibited asset management firms from introducing their versions of spot Bitcoin ETFs within the country. “The SEC has been following these developments closely, but we do not have a policy to allow spot Bitcoin ETFs to be established in Thailand for the time being,” the regulator said. The recent regulatory changes have not addressed the possibility of retail investors gaining access to spot Bitcoin ETFs.