On August 21, 2026, Thailand’s Securities and Exchange Commission (SEC) published two consultation papers that would broaden regulated access to crypto assets while tightening custody standards. The first proposes a framework for establishing crypto exchange-traded funds (crypto ETFs) in Thailand. The second proposes enhanced qualification requirements for foreign digital asset custodians serving mutual funds and private funds that invest in digital assets.

The proposals seek to expand regulated access to crypto assets while strengthening custody, governance, disclosure, and investor protection, and they affect fund managers, trustees, and licensed digital asset operators. Comments on both papers are due by September 20, 2026, and the SEC expects the resulting rules to take effect later in 2026.

Elevating Foreign Custodian Standards

Under current rules in effect since January 16, 2025, mutual funds and private funds investing in digital assets may use foreign custodians that meet qualifications similar to those set for domestic digital asset business operators. The SEC now proposes that foreign digital asset custodians satisfy two cumulative requirements:

• Compliance with the existing baseline qualifications: demonstrated expertise, robust cybersecurity measures, segregation of client assets, controls preventing unauthorized asset transfers, and sound financial standing.
• Supervision by a regulator that is either (1) an IOSCO Signatory A member under the Multilateral Memorandum of Understanding, the international arrangement through which securities regulators share information and cooperate on enforcement, or (2) a regulator in a jurisdiction that the Thai SEC designates as having adequate supervisory and investor protection standards.

The SEC is initially considering 11 jurisdictions for the approved-country list: France, Germany, Hong Kong SAR, Ireland, Japan, Liechtenstein, Luxembourg, Malaysia, Singapore, South Korea, and the United States. The SEC may expand this list over time based on its assessment of other jurisdictions’ regulatory frameworks governing custodian licensing, asset segregation, secure custody practices, client rights in insolvency, and custody agreement terms. Designation of a jurisdiction does not, however, automatically qualify every custodian based there; fund managers and trustees will still have to conduct case-by-case due diligence on each service provider, evaluating its regulatory scope, risk profile, and alignment with fund and investor interests.

The enhanced requirements would apply to foreign custodians used by mutual funds and private funds investing in digital assets and, if permitted by the SEC, by crypto ETFs. Existing funds would have 120 days from the proposed rules’ effective date to comply. Fund managers using foreign custodians may therefore wish to begin reassessing provider due diligence and monitoring, contractual protections, audit and information rights, and transition arrangements prior to the rules taking effect later in 2026.

Crypto ETF Framework: Prioritizing Thai Custodians

The SEC’s companion consultation addresses crypto ETF establishment and oversight, building on the previous hearing held during April and May 2026. The Capital Markets Committee approved the framework principles on June 16, 2026, and the SEC Board followed on July 2, 2026.

Under the proposed rules, crypto ETFs must use Thai-licensed digital asset custodians as a primary route. The SEC may permit foreign custodians when necessary and appropriate to market conditions, applying the same elevated qualification criteria detailed above. Each fund would be structured as a passive, single-crypto ETF and would generally be required to maintain an average annual net exposure of at least 80% of its net asset value to the relevant crypto asset, without using derivatives to obtain that exposure.

Fund managers must demonstrate readiness in personnel, systems, risk management, and investment strategy, and must identify service providers, including custodians, participant dealers, and market makers, before receiving approval.

The rules would permit digital asset custodians and certain other digital asset business operators—such as exchanges and brokers—to serve as trustees for crypto ETFs, subject to applicable financial, personnel, independence, and systems requirements. A digital asset custodian acting as trustee could hold the crypto assets itself, while another category of digital asset operator acting as trustee would need to appoint a licensed digital asset custodian. These distinctions will affect operating models, outsourcing arrangements, conflicts management, and the allocation of regulatory responsibility.

Thai Market Implications for Fund Managers and Digital Asset Operators

Requiring crypto ETFs to rely primarily on Thai-licensed custodians is likely to concentrate initial demand among a limited pool of qualified local providers. This may create capacity, pricing, counterparty, and business-continuity considerations for fund managers, while also creating opportunities for licensed custodians and other qualified digital asset operators to expand into fund-related services.

Fund managers launching crypto ETFs or managing funds with digital asset exposure should begin identifying and evaluating Thai-licensed custodians and other critical service providers. Where existing arrangements involve foreign custodians, managers should verify whether those providers meet the proposed dual-qualification test and assess whether contractual amendments or a change of provider may be required within the 120-day transition period. Because fund operations depend heavily on these providers, fund managers should also confirm that due diligence, incident-response protocols, contingency plans, and ongoing monitoring are documented and in place before the rules take effect.

For digital asset business operators, the framework opens pathways to expand services: custodians can position themselves to serve the anticipated crypto ETF market, while exchanges and brokers may develop trustee or execution capabilities. Opportunities may also arise for participant dealers, market makers, index and pricing providers, technology vendors, and specialist compliance and cybersecurity providers. Whether these roles prove commercially viable will depend on custody costs, liquidity, and market-making capacity, alongside valuation methodology, creation and redemption arrangements, tracking performance, operational resilience, and distribution reach. Operators seeking trustee registration will also need systems appropriate for asset oversight, transaction monitoring, fiduciary duties, and conflicts management.

Next Steps

Fund managers and trustees should assess current custodian arrangements against the proposed foreign-custodian criteria and evaluate domestic alternatives, while digital asset operators interested in trustee, custody, or execution roles should review their licensing scope and their readiness requirements for capital, personnel, systems, governance, and contractual arrangements.

In addition, stakeholders may also wish to comment on the availability and capacity of Thai-licensed custodians, implementation timeframes, and the sequencing of licensing and fund-approval processes, and safeguards that could support competition and operational resilience without weakening investor protection. If there are concerns on the above implications, comments should be submitted by September 20, 2026.