Thailand Securities and Exchange Commission launches consultation on tighter depository receipt rules and leveraged and inverse ETF risk controls

The Thailand Securities and Exchange Commission has opened a public consultation on proposed amendments covering Depository Receipts (DRs), Thai exchange-traded funds' investment in foreign leveraged and inverse exchange-traded funds (L&I ETFs), and margin lending for L&I ETFs. The package would tighten the quality and use of underlying securities for DRs, allow Thai ETFs to invest in foreign L&I ETFs only for portfolio management purposes, and introduce risk management guidelines for securities companies that provide margin loans on L&I ETFs. For DRs, the proposals would require higher-quality underlying securities in line with DRs being positioned as simple plain-exposure products. They would also add reporting and monitoring requirements to improve transaction transparency, and prohibit the use of underlying securities backing DRs for pledging, collateralization, encumbrance or other arrangements to obtain benefits, so that investors receive financial benefits from those assets in line with the product's objectives. The approval process for DR issuance and offerings would move to a Shelf Approval and Shelf Filing framework aligned with the regime for derivative warrants, with the aim of reducing costs and documentation and improving operational efficiency for issuers. For ETFs and margin lending, Thai ETFs would be permitted to invest in foreign L&I ETFs solely as a portfolio management tool, while margin loan rules would be updated with risk management guidelines reflecting the risks and volatility of L&I ETFs. The public hearing runs until 13 July 2026.