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Thailand’s Securities and Exchange Commission has advanced draft rules for domestic crypto ETFs, setting an 80% minimum exposure requirement and limiting the first eligible assets to Bitcoin and Ethereum.
The SEC announced the latest consultation on August 24 after reviewing feedback from an earlier April-May hearing. The framework would allow Thai asset managers to establish passive crypto ETFs listed exclusively on the Stock Exchange of Thailand.
Crypto ETFs Must Keep at Least 80% Exposure to One Asset
Under the draft rules, each crypto ETF must maintain average net exposure of at least 80% of net asset value to a single crypto asset over its accounting year.
The funds would operate as passive products designed to track their underlying crypto asset. Bitcoin and Ethereum will be the only eligible cryptocurrencies initially, with the SEC considering liquidity, broad market acceptance, network security and investor protection before adding others.
Each ETF must be established and managed by a Thai asset management company able to demonstrate sufficient personnel, operational systems and service-provider arrangements.
Bitcoin and Ether ETFs Would Trade Only on Thailand’s SET
Domestic crypto ETFs would have to be listed and traded exclusively on the Stock Exchange of Thailand.
Investors must receive information about the products and acknowledge that they understand the relevant risks before trading. Asset managers must also disclose the fund structure, investment mechanism, service providers and crypto-specific risks.
Business operators would be required to emphasize suitable asset allocation, excessive concentration risk and whether digital-asset exposure fits each investor’s risk tolerance and financial capacity.
The SEC also plans to allow mutual funds and private funds to invest in Thai crypto ETFs in addition to foreign crypto ETFs, subject to existing investment limits.
Thai-Regulated Custodians Remain Default Under Revised Rules
Crypto ETF assets would initially be safeguarded primarily by digital asset custodians regulated by the Thai SEC.
The regulator revised its custody approach after feedback from the April-May consultation. It may permit qualified foreign custodians in the future when necessary and appropriate, provided they meet prescribed supervisory and investor-protection standards.
Licensed digital asset businesses with sufficient readiness could also apply to act as fund supervisors specifically for crypto ETFs. Asset managers outsourcing digital asset portfolio management would have to use a licensed digital asset fund manager.
The rules remain in draft form, and no domestic Bitcoin or Ether ETF has been approved under the framework. Public comments are open until September 20, after which the SEC can consider revisions before finalizing the regulations.
