In brief
The Thai Securities and Exchange Commission (SEC) has launched Public Hearing No. AorPorKor. 5/2569 re: Principles on the Sale and Redemption of Mutual Fund Units to Support Instantaneous Transactions for Tokenized Funds ("Public Hearing"). Tokenized funds — mutual funds that issue units in tokenized form using blockchain or similar technology — may operate outside the traditional T+1 processing cycle if certain conditions are met. This Public Hearing ended on 11 February 2026. The tentative effective timeline is late Q2 2026.
In more detail
This client alert highlights key principles under the SEC's proposed tokenized fund regulations, summarized as follows.
1. Key characteristics and principles of tokenized funds
(1) Definition of tokenized funds
A tokenized fund refers to a mutual fund that issues all or part of its investment units in tokenized form (meaning the units are issued on an electronic network utilizing blockchain technology or a similar technology).
(2) Regulatory requirements applicable to tokenized fund issuance
Issuing tokenized fund units must also comply with existing regulations for offering securities, electronic securities, or other requirements as prescribed by the SEC. There is a possibility that additional regulations may be issued in the future to enhance the tokenized fund framework and amend existing regulations that currently do not support tokenized funds.
(3) Exemption to the T+1 processing cycle for tokenized funds
Under the current regulations for traditional mutual fund management, any increase in the number of units offered for sale, or cancellation of units redeemed by investors, must be done on the business day following the trading day (T+1). This condition creates a key blockage to the potential of tokenization, which can be executed and recorded in real time. Market participants must still comply with the T+1 rule, even though the tokenized fund can be executed and recorded instantly.
To unlock the full potential of tokenization, tokenized funds will be exempt from this T+1 requirement, provided that there is equal protection for existing investors and new investors, as well as between investors of traditional mutual funds and tokenized funds. The key principle is that investors should not receive different rights or benefits (e.g., dividend distributions, if any) merely because the units are issued in traditional or tokenized form, except for differences in trading price or execution methods driven by the business model.
(4) Licensing requirements
The amendments do not introduce any new regulatory or licensing framework. Issuers of tokenized fund units, as well as asset management companies that issue or manage tokenized funds, must comply with all other existing regulatory requirements for traditional mutual funds.
2. Observations and regulatory considerations
The SEC is in the process of amending the Securities and Exchange Act B.E. 2535, as amended, to accommodate electronic securities ("Electronic Securities Act"). The draft Electronic Securities Act was approved by the Cabinet on 10 June 2025, and it is now progressing through the remaining stages of the legislative process. However, since this Public Hearing focuses specifically on amendments to the regulatory framework governing mutual fund management, these proposed changes can be implemented independently and do not require the Electronic Securities Act to come into effect. The SEC may introduce additional standards for issuing electronic securities or electronic instruments in the future, which would further enhance tokenized funds going forward.
Looking ahead
The SEC's initiative on tokenized funds reflects its effort to build a regulatory foundation that supports the digital securities ecosystem in Thailand as specified in SEC Strategic Plan 2026-2028. While the current Public Hearing focuses on mutual funds, further developments are expected, particularly once the Electronic Securities Act and future SEC standards on electronic securities take shape. These developments signal the SEC's long‑term direction toward enabling more digital‑native capital‑market products and infrastructure, and asset management companies and other intermediaries should monitor developments.
For more details, please contact our team at Baker McKenzie.
* * * * *
Phetrada Kampusiri, Senior Associate, and Yanisa Nilkhet, Associate, have contributed to this legal update.