Thai SEC Proposes Stricter Regulations for Depositary Receipts

The Thai Securities and Exchange Commission (SEC) has initiated a public consultation process to overhaul the regulatory framework governing Depositary Receipts (DR). According to a report by Prachachat Business, the proposed changes aim to enhance the quality screening of foreign underlying assets. A key focus of these new measures is to restrict the use of cryptocurrency-linked ETFs and Leveraged & Inverse (L&I) ETFs as underlying assets for DRs. Additionally, the SEC is introducing new criteria to facilitate the inclusion of ASEAN stocks and is implementing stricter risk management measures for margin lending. For residents and investors in Thailand, these regulatory shifts are significant as they reflect a move toward greater market stability and investor protection. By tightening the criteria for what can be offered as a DR, the SEC intends to mitigate risks associated with highly volatile financial instruments. While these proposals are currently in the public hearing stage, they signal a potential shift in the investment landscape for those utilizing local brokerage services. It remains to be confirmed how these rules will be finalized and when they will officially take effect, as the commission is currently gathering feedback from stakeholders to refine the policy before implementation.