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SEC amends ETF regulations to expand varieties

Monday 18 December 2023 | No. 249 / 2023

Bangkok, 18 December 2023 – The Securities and Exchange Commission (SEC) has issued notifications amending the regulations on Exchange Traded Funds or ETFs to be on par with the international standards and to expand varieties of the funds in response to investors’ different needs. The notifications came into force on 16 December 2023.

One of the SEC objectives is to support investors to develop a robust financial health, using the capital market to accumulate wealth in response to their needs. As such, to expand investment choices for investors and enhance competitiveness of asset management companies (AMC), the SEC conducted a public hearing in November, proposing the principles and draft notifications for the amendments to regulations on ETFs, with which most of the respondents’ expressed opinions are in agreement.

The SEC has therefore issued the amended notifications on the ETFs with the salient features as follows:

1. Allowing actively managing strategies for ETFs, i.e., active ETFs, in addition to the existing passive ETFs;

2. Streamlining consideration procedure for underlying index which will be further contemplated for applicability to all types of index-tracking collective investment schemes, e.g., index ETFs or funds of funds/feeder funds that invest in all types of index funds etc.;

3. Permitting ETFs to invest in the assets permissible for general mutual funds’ investment, in which the AMCs have the duties to look into the suitability and liquidity of such assets;

4. Revising disclosure requirements on the funds’ portfolio holding to be easily accessed by investors on a daily basis, except for the portfolio holding of the active ETFs which shall be disclosed, as considered appropriate, according to their underlying assets, but at least on a quarterly basis;

5. Modifying consideration procedures of underlying indices, management strategies, and disclosure requirements for inbound foreign ETFs to be in line with those domestically established.

The amended notifications were published in the Royal Gazette and came into force on 16 December 2023. The ETFs established before such effective date shall comply with the revised regulations within 90 days of the effective date.

______________________

Remarks:

Three related notifications have been made available on the SEC web site, as follows:

(1) The Notification of the Capital Market Supervisory Board No. Tor Nor. 42/2566 Re: Investment of Funds (No. 26) dated 1 December 2023 (https://publish.sec.or.th/nrs/9938s.pdf) and Appendix 1 (https://publish.sec.or.th/nrs/9935s.pdf) Appendix 2 (https://publish.sec.or.th/nrs/9936s.pdf) and Appendix 3 (https://publish.sec.or.th/nrs/9937s.pdf) attached to the Notification

(2) The Notification of the Capital Market Supervisory Board No. Tor Jor. 43/2566 Re: Provisions relating to Offering for Sale of Units of Foreign Collective Investment Scheme (No. 2) dated 1 December 2023 (https://publish.sec.or.th/nrs/9939s.pdf)

(3) The Notification of the Office of the Securities and Exchange Commission No. Sor Nor. 29/2566 Re: Rules, Conditions, and Procedures for Management of Retail Funds, Mutual Funds for Accredited Investors, and Mutual Funds for Institutional Investors (No. 7) dated 1 December 2023 (https://publish.sec.or.th/nrs/9981s.pdf) and Appendix 9 (https://publish.sec.or.th/nrs/9934s.pdf) attached to the Notification

(4) Form 35-foreign ETF, in relation to the Notification of the Office of the Securities and Exchange Commission No. Sor Jor. 4/2561 Re: Additional Provisions Relating to Offering for Sale of Units of Foreign Collective Investment Scheme, is available on the SEC web site.

NEWS

Securities and Exchange Commission

Corporate Communication and Investor Service Department

Tel. (66)2033-9502-5 E-mail: press@sec.or.th

No. 249 / 2023	Monday 18 December 2023
SEC amends ETF regulations to expand varieties
Bangkok, 18 December 2023 – The Securities and Exchange Commission (SEC) has issued notifications amending the regulations on Exchange Traded Funds or ETFs to be on par with the international standards and to expand varieties of the funds in response to investors’ different needs. The notifications came into force on 16 December 2023.
One of the SEC objectives is to support investors to develop a robust financial health, using the capital market to accumulate wealth in response to their needs. As such, to expand investment choices for investors and enhance competitiveness of asset management companies (AMC), the SEC conducted a public hearing in November, proposing the principles and draft notifications for the amendments to regulations on ETFs, with which most of the respondents’ expressed opinions are in agreement. The SEC has therefore issued the amended notifications on the ETFs with the salient features as follows: 1. Allowing actively managing strategies for ETFs, i.e., active ETFs, in addition to the existing passive ETFs; 2. Streamlining consideration procedure for underlying index which will be further contemplated for applicability to all types of index-tracking collective investment schemes, e.g., index ETFs or funds of funds/feeder funds that invest in all types of index funds etc.; 3. Permitting ETFs to invest in the assets permissible for general mutual funds’ investment, in which the AMCs have the duties to look into the suitability and liquidity of such assets; 4. Revising disclosure requirements on the funds’ portfolio holding to be easily accessed by investors on a daily basis, except for the portfolio holding of the active ETFs which shall be disclosed, as considered appropriate, according to their underlying assets, but at least on a quarterly basis; 5. Modifying consideration procedures of underlying indices, management strategies, and disclosure requirements for inbound foreign ETFs to be in line with those domestically established. The amended notifications were published in the Royal Gazette and came into force on 16 December 2023. The ETFs established before such effective date shall comply with the revised regulations within 90 days of the effective date. ______________________ Remarks: Three related notifications have been made available on the SEC web site, as follows: (1) The Notification of the Capital Market Supervisory Board No. Tor Nor. 42/2566 Re: Investment of Funds (No. 26) dated 1 December 2023 (https://publish.sec.or.th/nrs/9938s.pdf) and Appendix 1 (https://publish.sec.or.th/nrs/9935s.pdf) Appendix 2 (https://publish.sec.or.th/nrs/9936s.pdf) and Appendix 3 (https://publish.sec.or.th/nrs/9937s.pdf) attached to the Notification (2) The Notification of the Capital Market Supervisory Board No. Tor Jor. 43/2566 Re: Provisions relating to Offering for Sale of Units of Foreign Collective Investment Scheme (No. 2) dated 1 December 2023 (https://publish.sec.or.th/nrs/9939s.pdf) (3) The Notification of the Office of the Securities and Exchange Commission No. Sor Nor. 29/2566 Re: Rules, Conditions, and Procedures for Management of Retail Funds, Mutual Funds for Accredited Investors, and Mutual Funds for Institutional Investors (No. 7) dated 1 December 2023 (https://publish.sec.or.th/nrs/9981s.pdf) and Appendix 9 (https://publish.sec.or.th/nrs/9934s.pdf) attached to the Notification (4) Form 35-foreign ETF, in relation to the Notification of the Office of the Securities and Exchange Commission No. Sor Jor. 4/2561 Re: Additional Provisions Relating to Offering for Sale of Units of Foreign Collective Investment Scheme, is available on the SEC web site.

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