SEC in talks over digital asset funds

SEC in talks over digital asset funds

Mutual funds keen to offer investors crypto

Representations of cryptocurrencies are seen in this illustration from Aug 10, 2022. (Reuters photo)
Representations of cryptocurrencies are seen in this illustration from Aug 10, 2022. (Reuters photo)

The Association of Investment Management Companies (AIMC) is in talks with the Securities and Exchange Commission (SEC) over plans to let asset managers set up funds that invest in digital assets, providing an alternative option for young people.

Mutual funds should have the opportunity to be included in digital asset development in Thailand, AIMC chairwoman Chavinda Hanratanakool said on Wednesday.

The AIMC, which has 21 member companies, expects discussions with the Thai regulator to take time to conclude, with a resolution possible sometime next year.

Under the proposal, asset management companies would set up mutual funds that directly invest in digital assets. With the digital asset expertise of their teams, asset management firms believe they are capable of managing digital assets in their portfolio, said Ms Chavinda, who is also the chief executive of Krungthai Asset Management Plc.

"There are young teams working in asset management companies. They are interested in digital assets and have good knowledge about such investments," she said.

"This is a good opportunity for the younger generation to use their knowledge and abilities to help structure digital assets as a new class for investors, especially because that generation is interested in investing in digital assets."

Allowing mutual funds to invest in digital assets will in turn help young people invest more through mutual funds and create interest in saving money and learning about new products, Ms Chavinda said.

Asset management firms can expand their customer bases into new areas of investment, she said.

At some point, the discussions need to involve the Bank of Thailand, which has concerns about digital assets. Notably, cryptocurrencies can affect the stability of a country's main currency and the security of its trading systems.

"I think digital assets can continue to grow. Regulators in many countries will pay more attention and adjust the regulations to reflect trends in the sector. Ultimately we cannot avoid digital money," Ms Chavinda said.

"Consumer spending in many countries has been converted to digital assets, but it will take many years for the system to stabilise. We should continue to develop an approach for digital asset management."

The AIMC said it would continue to work with and provide guidance to the SEC, the Stock Exchange of Thailand and the central bank, the three bodies that have the authority to make digital asset investments possible.

The most important factor is investor knowledge for them to really understand these kinds of assets, she said.

In a related development, Singapore-based digital asset exchange Zipmex said on Wednesday it has been in talks with four new investors who have expressed interest in buying stakes in the company. All of them have signed a non-binding offer and a memorandum of understanding.

"We have made significant progress in fund mobilisation, and this will benefit our creditors and customers the most," the company said in a statement.

Zipmex is currently finalising due diligence details with three investors.

A final decision about new investors is expected to be made very soon, said the firm.

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