Bangkok, Thursday 10 May 2018 - SEC is conducting a public hearing on the amendment of regulations governing money market funds to promote them as an alternative to bank deposit for liquidity management and a place for investors to park their cash temporarily.
At present, money market funds are used by investors as a tool to manage liquidity and a place to park money for a short time, besides keeping it in banking accounts. As of February 2018, the size of money market funds was 240 billion baht, or 3% of savings deposit. In the future the Deposit Protection Agency would reduce the maximum insured amount of bank deposit to only 1 million baht. Hence, money market funds are likely to grow in size and emerge as an alternative for people looking for the place to park their cash.
However, money market funds are currently subject to more stringent rules than other types of mutual funds. SEC therefore has amended the rules governing money market funds to enhance flexibility of asset management companies in managing funds and enable them to response to the needs of investors better. Key changes in the amendment include:
- Expanding the payment amount of redeemed investment units on the unit trading day
- Allowing asset management companies to fix the fund’s constant net asset value (NAV) by adjusting the number of investment units to reflect the change in investment unit price
- Allowing business operators to be exempted from conducting investors’ suitability tests if they offer for sale only low-risk money market funds.
The consultation paper can be found at www.sec.or.th/hearing . Stakeholders and interested parties are welcome to give comments and suggestions via the website, or facsimile at 0-2033-9660, or email: preeporn@sec.or.th or napaporn@sec.or.th. The public hearing ends on 5 June 2018.
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