The Bank of Thailand will again consider exempting the 30 percent reserve requirement on foreign holdings in the ThaiDEX SET50 exchange-traded fund, according Suchart Sakkankosone, director of the Exchange Control and Credits Department, Investor news reports.
Mr Suchart said the SET had renewed its request for the exemption to the central bank in a bid to boost liquidity from foreign investors.
Thailand’s first ETF will list on the Stock Exchange of Thailand tomorrow. The ThaiDEX SET50 ETF is similar to an index fund and based on constituents of the SET50 index, but its NAV is updated in real-time and can be traded similar to a stock on the market.
Mr Suchart said the key point for consideration would be the classification of such investment units as debt or capital securities. He said the central bank and the SET held different opinions. “We might consider the request once again as to whether such investment units should be defined as debt or capital securities,” he says.
Mr Suchart said the central bank was concerned that other mutual funds would ask for the exemption if it waived the reserve requirement for the ETF.