Thailand’s securities regulator is considering a framework that would allow intermediaries to offer retail investors access to certain digital asset derivatives listed in overseas markets.
The Securities and Exchange Commission’s plan would assess both the contract’s features and the market where it is traded. For retail access, a foreign contract would have to closely match a crypto derivative traded in Thailand in areas such as the underlying asset, maturity, leverage, and settlement mechanism.
Clearing and Regulatory Oversight Form Part of the Test
The overseas trading venue would also have to use a central counterparty to clear transactions. Its regulator must belong to international regulatory or exchange groups specified under the proposal.
Contracts falling short of the SEC’s proposed criteria would be available only to institutional investors. The regulator based that distinction on institutional investors’ greater ability to evaluate and manage products involving complexity and elevated risk.
The planned framework builds on Thailand’s evolving crypto derivatives framework and its existing approach to overseas derivatives investment.
The planned framework builds on Thailand’s existing approach to overseas derivatives investment. Under current rules, intermediaries can serve retail and high-net-worth clients seeking foreign derivatives when those instruments are comparable to products traded in the domestic market.
The SEC is proposing requirements specific to digital assets because crypto derivatives available abroad can vary in structure and risk.
Crypto Assets Enter Thailand’s Derivatives Framework
The consultation follows an earlier expansion of Thailand’s crypto derivatives framework covering the assets that can underpin derivatives in Thailand. Through a notification dated March 5, the SEC added cryptocurrencies and digital tokens to the list of permissible derivatives underlyings.
The SEC is also discussing potential contract specifications for those assets with the Thailand Futures Exchange.
The SEC is accepting public comments on the proposed amendments through Sept. 30. It has not announced when the changes would take effect.
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