Thailand has entered the draft version of the ETF Code. On 24 August, the local CVM indicated that public comments had been made on the initiation of two documents, covering the locally established encryption ETF rules and the revision of the eligibility criteria for offshore digital asset custodians to service mutual funds and private funds. The call for comments will continue until 20 September.
First phase is only for bitcoin and Ether.
According to the draft arrangement, the first products would only allow passive tracking of a single encrypted asset, with the mark limited to bitcoin or Ethera. Each fund can only correspond to one asset, indicating that the regulator still uses liquidity and market acceptance as an entry criterion.
Locally created encryption ETFs will be traded only on the Thai Stock Exchange. Investors can obtain bitcoin or poaching in securities accounts without having to manage their own wallets in the chain and without having to deal directly with such operations as private key custody.
Fund exposure must not be lower than 80%.
The draft requires that for each ETF, the average net exposure to its targeted encrypted assets must not be less than 80 per cent of the net value of the fund during each fiscal year. This means that the relevant product needs to maintain a high spot-tracking ratio that does not deviate significantly from the core target.
Fund managers are also required to demonstrate their operational capacity, including qualified personnel, adaptation systems and services providers ' resources to support the operation of the relevant products. Investment activities involving digital assets can also be entrusted to the holders of digital assets fund managers only.
In addition, existing mutual funds and private fund-raising funds can now be equipped to encrypt ETFs offshore within the investment limit. If the amendment is adopted, such funds could also invest in local encryption ETF in Thailand under the same investment control framework.
Hostage is still dominated by local institutions.
Trusteeship arrangements are one of the priorities of this round of rules. The Thai CVM indicated that the revised programme would remain the main option, but could also allow participation of qualified off-shore custodians where necessary and appropriate.
If mutual funds and private funds use an offshore trust, the latter are subject to supervision by the supervisory authority of the place in which they are located, and the regulatory standards and rules for the protection of investors ' assets in the jurisdiction in which they are located are subject to the approval of the Thai Securities Commission.
The draft also allows qualified digital asset custodians, as well as other well-prepared digital asset operators, to act as encrypted ETF trustees, provided that the relevant agencies continue to meet the requirements of funding, staffing and operating systems.
The regulatory framework continues to expand.
This set of ETF rules is not an isolated advance. The Thai Government included encrypted currency in the base asset range under the Derivatives Trading Act in February of this year, paving the way for futures and options for assets such as bitcoin. Since then, regulators have also proposed to simplify the process of applying for a derivative brand licence by a licensed digital asset company.
Prior to that, Thailand had approved the country ' s first spot bitcoin ETF fund in June 2024, but only for institutional and super-high net worth investors and not open to ordinary retail investors. In contrast, the draft further establishes a framework of rules for encrypted ETFs established locally and listed directly in Thailand.
In terms of the regulatory rhythm, Thailand is simultaneously advancing encryption ETF, derivatives and tokenized products. Previously, regulators had also mentioned that a monetization box was being promoted in cooperation with the Central Bank of Thailand, and that bond coins were one of the assets under consideration.