SEC is proposing to amend the regulations on unitholding limitations of mutual funds. Proposed amendments include, for example, changing the methods of unitholding calculation and allowing mutual funds to be exempted if asset management companies comply with all obligations, such as widely allocating investment units to the general public, managing liquidity effectively and having measures to prevent mutual funds from being exploited for any other benefit than those which ought to be obtained from the investment.

At present, the number of investment units held by any person or any associated persons shall not be in aggregation at a time greater than one third of the total sold units of a mutual fund. Such limitations on unitholding are to ensure that investment units are widely allocated to the public and that mutual funds are not exploited or dominated by large unitholders who may interfere with the fund management. However, the Revenue Department has revised the tax regulations on investment in mutual funds with asset allocation in fixed income which has contributed to reducing inequality in the tax rates. Moreover, asset management companies have concerned that these rules impose additional costs and are obstacles to extend the fund size at the initial stage. Therefore, SEC has put forward the amendments to the regulations on the limitations on unitholding in mutual funds.

The consultation paper is available at www.sec.or.th/hearing. Stakeholders and interested parties are welcome to give comments and suggestions via SEC’s website, or facsimile at 0-2033-9781 or email: thanunya@sec.or.th or sumitra@sec.or.th. The public hearing ends on 10 January 2020.

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