Bangkok, January 21, 2014 ?  The SEC revised rules governing provident fund investment for more clarity and flexibility in line with international standards. The new rules have become effective in 2014.
 
Starting from January 1, 2014, provident funds are allowed to invest in derivatives for the purpose of efficient portfolio management (EPM) up to a permissible proportion. The funds were previously allowed to invest in derivatives only for hedging. Furthermore, for provident funds with a ?do it yourself? (DIY) policy that allow the fund members to determine their own investment proportion in alternative assets such as gold mutual funds and investment in derivatives other than hedging purpose, management companies may choose to control the permissible investment proportion at individual level.
 
In addition, effective from July 1, 2014 onwards, all investment proportions of master funds will be calculated at sub fund level. Calculation of investment proportion in an employer?s assets must include investment in (i) the companies in such employer?s group and (ii) investment units of mutual funds and trust units of trust having main objective to invest in the assets of employer?s assets and the companies in such employer?s group. In this regard, the companies in such employer?s group will be defined, in consistence with those applicable to mutual fund industry, as parent and subsidiary companies prescribed by the Federation of Accounting Professions? accounting standards concerning consolidated financial statements.
 
SEC Secretary-General Vorapol Socatiyanurak said ?The SEC has revised the rules governing provident fund investment in line with international standards for more clarity and investment opportunity for provident fund without compromising risk management of funds and members. Management companies are urged to communicate with fund committee and members for proper preparation of the pertinent agreements or revising fund articles accordingly.