Thailand’s Securities and Exchange Commission (SEC) is seeking public feedback on drafted regulations for spot bitcoin and ethereum exchange-traded funds (ETFs). The regulator disclosed two feedback exercises covering the draft rules and amended eligibility criteria for foreign custodians.
According to the SEC announcement, any digital currency ETF must be operated by a licensed asset management company (AMC). These funds must comply with the regulatory framework generally applicable to ETFs listed on the Stock Exchange of Thailand (SET), requirements governing investment in digital assets by mutual funds, and additional investor protection measures. Asset managers are required to showcase all operational arrangements under the proposals.
Eligibility and Trading Requirements
Bitcoin (BTC) and ethereum (ETH) funds will be the first to be eligible under the draft framework. If regulators are satisfied with the outcome, altcoin funds could be permitted in the future. The initial proposals do not allow wrapped-style funds. Additionally, the crypto ETFs must be listed and traded exclusively on the SET.
Regarding custody, the SEC prefers domestic solutions but noted that foreign custody solutions could qualify if deemed necessary and appropriate to allow closer regulatory oversight. The proposal addresses both Thai-centric crypto funds and foreign ETFs.
Focus on Retail Investors
This initiative follows previous regulatory steps by Thailand's securities authority. In June 2024, the SEC approved the ONE Bitcoin ETF (ONE-BTCETFOF-UI), which was structured as a wrapper fund that did not hold actual bitcoin and was restricted to wealthy and institutional investors.
In contrast, the latest announcement focuses on retail investors by opening the pathway to legitimate spot crypto funds traded on the SET that hold actual digital assets under Thai financial laws.
The public comment period runs following the regulator's recent publication of the draft rules.
