Thailand’s Securities and Exchange Commission ( SEC ) has opened a public consultation on proposed amendments to its mutual fund regulations, in a bid to formally accommodate tokenized mutual funds within the country’s capital market framework.

The proposed changes will explicitly define what tokenized mutual funds are for the first time, as well as establish standards for their sale and redemption.

The consultation signals the Thai regulator’s continued efforts to integrate fintech innovations into its capital markets while maintaining regulatory clarity and investor protection.

Under the proposed framework, the SEC plans to introduce an official definition of what a “tokenized fund” is. This would differentiate mutual funds that issue investment units as digital tokens – typically using blockchain or similar distributed ledger technology – from those that use conventional book-entry systems, and will classify them as a distinct, but equally, regulated product type.

Previously, Thai regulations did not explicitly define or address tokenized mutual funds. As a result, such products would have had to fit within rules designed for traditional fund structures, creating uncertainty over how existing requirements should apply to token-based issuance. In its efforts to formalize the definition, the regulator aims to reduce ambiguity for asset managers, technology providers and investors engaging with said products.

Additionally, the proposal also sets out compliance expectations for tokenized mutual funds. Under the draft principles, these funds would be required to meet standards prescribed by the SEC, either under existing securities issuance rules or under frameworks governing electronic transferable records.

Finally, the SEC is considering exempting tokenized funds from existing batch processing guidelines for traditional mutual funds.

Under the proposed rules, tokenized mutual funds would be exempt from existing timeframe requirements that govern the timeframe of when investment units can be created or cancelled following subscriptions or redemptions.

At present, regulations are built around traditional fund operations, where such adjustments are processed in fixed intervals rather than in real time. However, because tokenized funds rely on digital systems that can issue or cancel units almost instantly, applying these legacy timing rules could create regulatory friction.

Since tokenized fund units can potentially be issued and redeemed more rapidly through automated digital systems, the SEC has proposed exemptions in order to allow tokenized fund issuance and redemptions without breaching legacy timing requirements.

The regulator is accepting feedback from industry participants and the public through its official consultation channels, until February 11 2026, after which the regulator will consider responses before finalizing any amendments and publishing said rules.

If adopted, the changes would mark a regulatory step toward integrating tokenized mutual funds into Thailand’s mainstream capital markets, while keeping them subject to established oversight principles.

The move by the regulator is a departure from its initially lukewarm reception of digital assets. Previously, the government imposed strict restrictions against using digital assets for payment and banned the advertisement of said products.

However, in recent years, Thailand has positioned itself as an active participant in digital finance regulation, particularly in areas related to digital assets and market infrastructure, being one of the first countries in Southeast Asia to allow foreign tourists to pay for goods and services using crypto.