Thailand advances spot Bitcoin and Ether ETF rules, sets an 80% exposure floor Thailand’s Securities and Exchange Commission has moved a long‑anticipated framework for locally listed spot Bitcoin and Ether ETFs into formal draft regulations, proposing strict exposure and custody rules as it opens public consultation through Sept. 20. What’s new - The SEC opened two consultation papers on Aug. 24: one for domestically established crypto ETFs, and one revising qualification standards for foreign digital-asset custodians serving mutual and private funds. Comments are being accepted until Sept. 20. - The draft advances a model first circulated for feedback in April and reflects changes driven largely by custody concerns raised by respondents. Key features of the draft ETF framework - Single‑asset passive ETFs: In the initial phase, asset managers may only offer passive ETFs that track a single cryptocurrency—restricted to Bitcoin or Ether because the SEC deems those the most liquid and widely accepted. - 80% exposure floor: Each ETF must maintain an average net exposure of at least 80% of net asset value to its underlying crypto over each accounting year. - Listing venue: These ETFs would trade exclusively on the Stock Exchange of Thailand (SET), allowing investors to gain crypto exposure via securities accounts rather than by holding coins or managing wallets. - Manager and operational readiness: Fund managers must demonstrate adequate systems, qualified personnel and access to capable service providers. Investment of digital assets can be delegated only to licensed digital asset fund managers. - Trustee and custody rules: The default requirement is for onshore (Thai) licensed digital-asset custodians. The SEC retains discretion to approve qualified foreign custodians “when necessary and appropriate,” but foreign custodians must be supervised by a regulator with adequate investor-protection standards if used. - Qualified custodians and other prepared digital-asset businesses may serve as trustees if they meet financial, staffing and operational thresholds and maintain them while performing trustee duties. Scope and restrictions - Mutual and private funds: Existing mutual and private funds that already invest in foreign crypto ETFs could, under the amendments, invest in Thai‑domiciled crypto ETFs under the same investment limits and controls. - No alternative cross‑border wrappers initially: Instruments referencing overseas crypto ETFs—such as depositary receipts linked to foreign crypto ETFs—will not be permitted in the first stage. The SEC wants locally established funds to be the primary listed route for domestic investors. Regulatory context and timeline - The SEC first sought feedback on ETF principles in April and says most respondents supported the plan, prompting the current refinements on custody and operational requirements. - Thai regulators have been actively building market infrastructure through 2026: in January the products received approval in principle; in May the SEC proposed net-capital and custody rule changes to boost local custody capacity; in February the government recognized crypto as eligible underlying assets under the Derivatives Trading Act and has been coordinating contract, licensing and exchange/clearing requirements for futures and options. - Thailand already approved a restricted spot Bitcoin product in June 2024—ONE Asset Management’s ONE-BTCETFOF-UI—for institutions and ultra‑high‑net‑worth investors only. The new draft goes further by creating rules for ETFs domiciled and listed in Thailand for broader investor access (subject to the structure and eligibility limits). Investor protection - The framework includes mandatory disclosures about fund structure and risks and calls for investor education measures so buyers understand cryptocurrency exposure before trading. What happens next - The SEC will accept public comments on the ETF rules and the foreign custodian proposal until Sept. 20. After that, the regulator will proceed with the formal rulemaking process and potential implementation. Why it matters - Thailand’s approach aims to open regulated, exchange‑listed access to spot Bitcoin and Ether while prioritizing custody safety and operational readiness. By favoring domestic custodians but allowing limited foreign participation, the SEC is balancing local market development with practical flexibility—positioning the country to expand institutional crypto offerings while attempting to limit operational and security risks for retail investors. Read more AI-generated news on: undefined/news