Thailand to Allow Bitcoin, Ether ETFs on Local Exchange From Oct. 16

Thailand will allow Bitcoin and Ether exchange-traded funds to list on its domestic stock market, opening a way for investors to gain exposure through the securities market without using crypto exchanges. Brokerages, however, will be barred from offering margin loans for ETF purchases.

Thailand’s Securities and Exchange Commission said on Oct. 8 it had finalized rules governing the establishment, management and custody of crypto ETFs. The rules will take effect on Oct. 16. Initial eligible assets will be limited to Bitcoin and Ether, and listing and trading will be allowed only on the Stock Exchange of Thailand.

The ETFs must be managed as passive products that track the price of the underlying crypto asset. Net exposure to a single crypto asset must be maintained at 80% or more of average net asset value during the fiscal year. Fund assets must be held by digital-asset custodians supervised by the SEC.

The regulator also put investor safeguards in place. Securities firms will not be allowed to provide margin financing for crypto ETF purchases. Before trading, investors must receive an explanation of the product’s features and risks and confirm they understand them. Asset managers must fully disclose the product structure, investment method, related service providers and key risks.

The investment scope for existing funds has also been widened. Mutual funds and private funds that had previously been allowed to invest only in overseas crypto ETFs will now be able to invest in crypto ETFs established in Thailand as well. Existing investment limits will remain in place.

At the same time, Thailand moved to restrict indirect investment through overseas products. In the initial phase, it will not allow the issuance or sale of alternative instruments such as depositary receipts tied to overseas crypto ETFs. Thai securities firms will also be barred from brokering overseas crypto ETF investments for retail clients, excluding institutional investors and ultra-high-net-worth individuals.