May 2021
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May 2021
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Thailand securities regulator proposes adding financial literacy into investor classification

The Securities and Exchange Commission (SEC) is seeking feedback on its proposal to  reclassify investors from two groups currently into four:  professional, qualified, affluent and retail
By Goh Thean Eu   
May 5, 2021

Thailand’s securities regulator wants to include investment knowledge and financial literacy in a proposed reclassification of investor types, in order to protect them from risk.

The Securities and Exchange Commission (SEC) is seeking feedback on its proposal to reclassify investors from two groups currently into four: professional, qualified, affluent and retail.

A professional investor will need proven experience in investments or credentials as an analyst, and a net worth of at least 60 million baht (US$1.93 million), double that of affluent investors.

“Besides the financial assets requirements, qualified and affluent investors must meet qualifications regarding knowledge about investment products and risks, which can be based on their experience with risk assets and asset management,” the SEC says in a statement on May 3.

The regulator currently classifies investors into accredited and retail, based solely on their net worth. An accredited investor must have a net worth of at least 50 million baht or an equity portfolio worth more than 10 million baht.

High-net-worth investors are allowed to invest in riskier assets, such as high-yield bonds and crypto currencies. The SEC says this is consistent with the general principles in developed countries.

“However, it has several limitations. The regulations do not address the likelihood that the investors qualified by the wealth requirements may still lack understanding of financial products’ features and related risks,” the regulator says.

The proposal is open for public comment until May 21.