Thailand allows creation and trading of cryptocurrency ETFs — Bangkok Post

In Thailand, the Securities and Exchange Commission has introduced rules allowing the creation and trading of exchange-traded funds linked to cryptocurrencies. The new mechanism is intended to expand investment opportunities and includes investor protection requirements, Bangkok Post reports.

Only Bitcoin and Ethereum

At the initial stage, cryptocurrency ETFs will be able to invest only in Bitcoin and Ethereum. Asset selection takes into account their liquidity, market recognition, network security, and investor protection.

Such funds must use passive investment strategies. During each financial year, they must maintain an average net exposure to a single cryptocurrency of at least 80% of net asset value. Asset management companies planning to launch such funds must confirm the readiness of their staff, operating systems, and service providers.

The funds' crypto assets must be held by licensed digital asset custodians supervised by the Commission. ETFs may be admitted to listing and trading only on the Stock Exchange of Thailand.

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Requirements for investors and intermediaries

The rules also require disclosure of information on the investment structure, fund operating mechanisms, service providers, and product-specific risks. Before trading begins, investors must undergo risk familiarization and confirm that they understand the risks.

Brokerage companies must facilitate appropriate allocation of clients' assets and warn them against excessive concentration of investments in digital assets. Margin loans for purchasing cryptocurrency ETFs will be prohibited in line with existing restrictions on borrowing to purchase cryptocurrencies through digital asset operators.

The new rules also allow Thai mutual and private funds to invest in cryptocurrency ETFs established in the country. Previously, they could invest only in foreign cryptocurrency ETFs, while existing investment limits remain unchanged. At the first stage, products linked to foreign crypto ETFs, including depositary receipts for such funds, will not be permitted.