SEC prepares to adjust investment criteria for mutual funds and private funds in digital assets

The SEC is opening for comments on the principles and draft announcements to improve the criteria for mutual funds and private funds (funds) that invest in digital assets in order to create equality in providing investment services abroad to large investors through securities companies and asset management companies and to benefit asset allocation through experts. After crypto ETFs were approved for establishment and traded on the US stock exchange, a number of Thai investors showed interest in such investments, which securities companies can provide services to large investors** to invest in foreign products without limiting the investment proportion. While the current investment criteria of the fund have not yet specified investment in digital assets, the Securities and Exchange Commission (SEC), with the approval of the Securities and Exchange Commission in the December 2023 and March 2024 meetings and the Capital Market Supervisory Board in the April 2024 meeting, therefore sees fit to improve the crite ria for funds investing in digital assets (DA) with appropriate investor protection measures as follows: 1. Add investment tokens as assets that funds can invest in, with the same investment ratio as transferable securities such as stocks and bonds, etc., because they have similar characteristics and risks. Increase flexibility for funds to invest in crypto assets at a risk level appropriate to the type of investor. Funds for large investors * can invest in crypto ETFs without any investment proportion limits in order to create equality in competition between securities companies and investment management companies (AMCs). In the case that such funds invest directly or indirectly in crypto assets through futures contracts, it is limited to not more than 20 percent of NAV. Meanwhile, funds for retail investors ** can have total crypto asset exposure through ETFs or foreign mutual funds not exceeding 5 percent of NAV for the benefit of asset allocation through experts, with the following characteristics: (1) It is a fund established after the new announcement takes effect to prevent impacts on investors in the fund who may not wish to have risk in such assets. (2) It has an active management strategy and is a mixed mutual fund with a main investment policy for asset allocation, equity mutual funds or alternative asset mutual funds. This does not include tax privilege funds. (3) Clearly disclose information and warn investors about crypto asset exposure. Improve related criteria to support the establishment and management of funds investing in DA, such as asset custody, DA value calculation, information disclosure, appropriate advertising, and improving the suitability test to cover investment in crypto assets, etc. The SEC is therefore open to hearing opinions on the principles and draft announcements regarding the improvement of the criteria for mutual funds and private funds that invest in digital assets. The said opinion submission document has been published on the SEC website at https://www.sec.or.th/TH/ Pages/PB_Detail.aspx?SECID=1020. Those concerned and interested persons can express their opinions on the website or by email thanunya@sec.or.th chavisa@sec.or.th or pattarav@sec.or.th until November 8, 2024. Source: Thai News Agency