Bangkok, Friday 9 August 2019 - SEC is seeking public comments on the revised guideline on maintaining liquidity of fixed income funds to be more in tune with current market situations and their redemption and settlement policies in order to support the growth of the mutual fund industry.
Fixed income funds are steadily
growing with more diversified investment portfolios. As of the end of 2018, net
assets value of fixed income funds was approximately 2.6 trillion baht, most of
which are fixed income funds making daily redemptions and same-day
settlements or settlements on the next business day. It is therefore crucial
that they maintain adequate liquidity to respond to emerging market situations.
SEC has proposed to revise
the guideline on maintaining liquidity of fixed income funds in order to match
their redemption and settlement policies by requiring fixed income funds to
maintain sufficient liquid assets, which can readily be converted to cash, so
that they are able to respond to market conditions without having significant
impact on their asset market prices. The revised guideline mandates that 1)
liquid assets of fund investment in
Thailand be updated including their qualifications by item, for example, cash,
bank deposits, bills of exchange, promissory notes, Thai government debt
instruments, other debt instruments and ordinary shares; 2) the guideline for
assessing liquidity for fund investment overseas be updated and 3) the scope of
application of the revised rules be updated.
The consultation paper can be found at www.sec.or.th/hearing. Stakeholders and interested parties are welcome to give
comments and suggestions via SEC’s website, or email: teerawat@sec.or.th or patarapon@sec.or.th. The public
hearing ends on 9 September 2019.