The Thailand Securities and Exchange Commission has issued 11 notifications establishing a domestic crypto exchange-traded fund framework following two rounds of consultation. Effective Oct. 16, crypto ETFs must be passively managed, track an eligible crypto asset and maintain average net exposure of at least 80% of net asset value to a single crypto asset over each accounting year. Bitcoin and Ethereum will be the only eligible assets initially, and the funds must trade exclusively on the Stock Exchange of Thailand. Asset management companies must demonstrate sufficient personnel, systems and service provider arrangements, while fund assets may be safeguarded only by SEC-regulated digital asset custodians. Investors must receive risk education and confirm their understanding before trading, and securities companies must emphasize suitable allocation and risk tolerance. Margin loans for crypto ETF purchases are prohibited. Asset management companies may outsource digital asset investment management only to licensed digital asset fund managers. Qualified digital asset businesses may register as mutual fund supervisors solely for crypto ETFs, subject to financial, staffing and operational requirements. The rules also allow mutual and private funds to invest in Thai crypto ETFs within existing limits, while initially restricting alternative products and services linked to foreign crypto ETFs for investors other than institutional and ultra-high-net-worth investors.

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