Thailand SEC Publishes Draft Rules for Bitcoin and Ether ETFs
Thailand's Securities and Exchange Commission has shifted its crypto ETF project from a statement of intent to enforceable draft rules. The regulator published two consultation papers on 25 August 2026, one containing draft regulations for locally listed spot Bitcoin and Ether exchange-traded funds, and a second proposing qualification standards for foreign digital asset custodians serving mutual and private funds that invest in digital assets. For accounting firms, fund administrators, and CFOs with Thailand exposure, the proposals carry immediate planning implications around bitcoin accounting, ethereum accounting, and fund-level reporting structure.
From Principles to Draft: What Changed Since April
The Thai SEC ran an earlier consultation in April 2026 that set out broad principles for a domestic crypto ETF market. Most respondents backed the framework in principle, but feedback concentrated on one specific area: custody arrangements. That feedback was significant enough to prompt the regulator to revise its proposed approach before moving to the drafting stage, rather than proceeding directly to final rules.
The April Feedback Loop
The SEC noted that respondents broadly supported the direction of travel, which gave it confidence to advance. At the same time, the custody question signalled that industry participants wanted greater clarity on the relationship between onshore and offshore holding structures. The revised draft addresses that directly, as discussed below.
Scope of the Two Consultation Papers
The first paper covers draft regulations governing Thai crypto ETFs themselves: which assets qualify, how funds must be structured, where they trade, and what exposure thresholds apply. The second paper is a standalone proposal addressing the qualification criteria that foreign digital asset custodians must meet before they can serve mutual funds or private funds investing in digital assets. The two papers are related but legally distinct, meaning asset managers and custodians may need to respond separately.
Key Parameters of the Draft ETF Rules
The draft regulations are specific about structure and constraints. Understanding each parameter matters for any firm that may need to revise its crypto bookkeeping software configuration or fund accounting templates once the rules are finalised.
Eligible Assets and Trading Venue
During the initial phase, only Bitcoin and Ether qualify as underlying assets. Each ETF must track a single crypto asset, so a combined BTC/ETH product is not permitted under the current proposal. All Thai crypto ETFs would trade exclusively on the Stock Exchange of Thailand, meaning settlement, custody linkage, and end-of-day NAV calculations will all run through SET infrastructure.
The 80% Exposure Requirement
Each ETF must maintain average net exposure of at least 80% of its net asset value to its single underlying crypto asset, measured across each accounting year. This threshold has direct implications for fund accountants. An ETF cannot hold cash, derivatives, or other instruments in quantities that push the crypto allocation below that annual average, which constrains rebalancing flexibility and means daily exposure tracking will be a compliance function, not just a portfolio management one. Firms building out their digital asset accounting software stack for fund clients should flag this requirement now: the annual averaging methodology means a single quarter of underexposure can create a breach even if the fund recovers quickly.
Mutual Fund and Private Fund Access
The draft rules would allow both mutual funds and private funds to invest in Thai-domiciled crypto ETFs, in addition to the foreign crypto ETFs they are already permitted to hold subject to existing investment limits. This is a meaningful expansion of the eligible universe. It also creates a layered accounting question: a mutual fund holding a Thai ETF that itself holds Bitcoin now has two tiers of crypto exposure to account for, each with potentially different valuation and reporting treatments.
What Is Excluded in the Initial Phase
The regulator has explicitly excluded alternative products linked to foreign crypto ETFs, including depositary receipts that track them, from the initial phase. This limits the scope of indirect exposure routes and keeps the initial regulatory perimeter tight. Firms expecting to structure around foreign ETF wrappers will need to wait for a later phase before that route is available domestically.
Custody: The Central Revision
Custody was the issue that triggered the revised draft, and the SEC's position is carefully worded. Onshore digital asset custodians remain the primary required providers for crypto ETFs during the initial phase. However, the SEC has introduced a conditional exception: it may permit the use of qualified foreign digital asset custodians "when necessary and appropriate in light of prevailing circumstances."
What the Onshore-First Requirement Means for Firms
The onshore-first rule keeps the initial phase within the Thai regulatory perimeter, which limits counterparty risk from a supervisory perspective but also constrains the custodian pool. Asset managers that use international prime brokers or global custodians for their existing crypto holdings will need to assess whether those providers qualify under the Thai framework or whether a separate onshore custody arrangement must be established.
From a bitcoin accounting and ethereum accounting standpoint, using a domestic custodian may also affect how positions are reconciled with existing global ledgers. Firms relying on a single crypto bookkeeping software instance to consolidate multi-jurisdiction holdings should check whether their current tools support segregated custody-venue reporting at the fund level.
Foreign Custodian Qualification Standards
The second consultation paper addresses foreign custodians serving mutual and private funds more broadly. Under the proposal, a foreign provider must be supervised by a regulatory authority that holds legal powers over it. It must also operate under regulatory and investor asset protection standards that the Thai SEC judges to be adequate. The SEC retains discretion in that adequacy assessment, which means there is no automatic equivalence for custodians already licensed in major jurisdictions. Firms should not assume that a VARA licence, an FCA registration, or a MAS approval will be automatically recognised without a separate Thai SEC assessment.
Accounting and Reporting Implications
The draft rules create a set of accounting questions that fund teams and their advisers need to address before the final regulations are published.
Valuation and Fair Value Measurement
Bitcoin and Ether held by an ETF will need to be measured at fair value on each NAV calculation date. Under IFRS, crypto assets held by an investment fund are typically classified as financial assets at fair value through profit or loss, provided the fund meets the definition of an investment entity. Thai fund administrators will need to confirm that their valuation methodology, including the selection of a principal market and the treatment of bid-ask spreads, is consistent with IFRS 13 or the applicable Thai Financial Reporting Standards equivalent. The 80% exposure rule adds a compliance dimension to the valuation process: the NAV used to assess the threshold must be calculated consistently and auditably across the full accounting year.
The Layered Fund Structure Problem
Where a mutual fund invests in a Thai crypto ETF rather than holding Bitcoin or Ether directly, the fund's exposure to crypto is one step removed. Under look-through accounting principles, the mutual fund may still need to disclose the underlying crypto exposure in its financial statements and risk disclosures. The interaction between the fund's own reporting requirements and those of the ETF it holds is an area where good digital asset accounting software with look-through capability will matter significantly, particularly if the fund also holds foreign crypto ETFs alongside the Thai-domiciled ones.
Tax Treatment for Fund Investors
The draft rules do not address tax directly, but the structure of the products has tax implications for investors. Gains realised through a Thai-listed ETF may be treated differently from direct crypto gains under Thai Revenue Department rules. Institutional investors, family offices, and fund-of-fund managers with Thai exposure should seek specific Thai tax advice on how ETF distributions and capital gains will be classified once the product is live. This is particularly relevant for foreign funds investing in Thai crypto ETFs under the cross-border access provisions of the draft rules.
What Accounting Firms and CFOs Should Do Now
The consultation window is live as of 25 August 2026. Firms that engage during this period can influence the final rules, particularly on custody qualification criteria and the annual averaging methodology for the 80% exposure test. There are several concrete actions worth taking now.
Review the Consultation Papers Directly
The Thai SEC publishes consultation documents on its official website. Any firm or adviser with Thailand-facing mandates should read both papers in full rather than relying on summaries. The custody paper in particular contains criteria that will affect operational set-up decisions for asset managers and their service providers.
Assess Your Current Crypto Accounting Software Stack
If your firm already handles bitcoin accounting or ethereum accounting for fund clients, check whether your systems can support: annual average exposure calculation at the fund level, look-through reporting for funds-of-funds, and segregated custodian reconciliation across onshore and offshore providers. Where gaps exist, the lead time before the rules are finalised is the right moment to address them. A review of your crypto accounting software capabilities now avoids a rushed upgrade when the final rules drop. For context on the risks of leaving accounting infrastructure gaps unaddressed, see our coverage of digital asset accounting software considerations for fund teams.
Track the Broader Regional Picture
Thailand's move sits within a wider pattern of Asia-Pacific regulators tightening and formalising digital asset market structure. For firms managing multi-jurisdiction crypto portfolios, keeping pace with global crypto policy shifts driving new market-structure obligations is essential context for resource and compliance planning.
Frequently Asked Questions
Which crypto assets are eligible under the Thai SEC draft ETF rules?
Only Bitcoin and Ether qualify during the initial phase. Each ETF must track a single asset, so a blended product covering both is not permitted under the current draft.
What does the 80% net exposure rule mean for fund accountants?
Each ETF must maintain an average net exposure of at least 80% of its net asset value to its underlying crypto asset, calculated across the full accounting year. This creates an ongoing measurement obligation, not just a point-in-time check, and must be tracked and documented throughout the year to demonstrate compliance.
Can foreign custodians serve Thai crypto ETFs?
Not as a default. Onshore custodians are the primary required providers during the initial phase. The SEC may grant exceptions for foreign custodians, but only if they meet specific supervisory and investor protection standards assessed by the Thai SEC on a case-by-case basis. Existing licences from other jurisdictions do not guarantee recognition.
How should a mutual fund account for holding a Thai crypto ETF?
The mutual fund's exposure to Bitcoin or Ether is indirect but may still need to be disclosed and potentially looked through for risk and financial reporting purposes. The applicable accounting treatment depends on the fund's classification and the relevant reporting standards, so fund teams should confirm the approach with their auditors before the product goes live.
When will the final rules be published?
The consultation papers were published on 25 August 2026. The SEC has not stated a fixed timeline for finalising the rules in the materials referenced, but the move from an April principles consultation to a full draft in under five months suggests the regulator is moving quickly. Firms should monitor the Thai SEC's official publications for the closing date and any subsequent rule finalisation notices.
Source: Cointelegraph