[DigitalToday reporter Yoonseo Lee] Thailand's securities regulator is reviewing a plan to allow retail investors access to overseas crypto derivatives that meet certain standards.

On Sept. 1 (local time), blockchain media outlet The Crypto Basic reported that Thailand's Securities and Exchange Commission is discussing a regulatory framework that would let brokers offer some digital asset derivatives listed on overseas markets to retail investors.

The key question is how far to open overseas products within the regulator's framework. The Securities and Exchange Commission set out an approach that would review both the structure of the contract and the conditions of the market where the product is traded. It said the products must closely match crypto derivatives traded in Thailand in terms of the underlying asset, maturity, leverage and settlement method.

Conditions would also apply to the overseas trading market. The market where trading takes place must clear trades through a central counterparty. The regulator overseeing that market must also belong to an international regulatory body or an exchange-related association specified in the proposal. Products that do not meet these criteria would be available only to institutional investors.

The revision is based on Thailand's existing regulatory framework for investing in overseas derivatives. Brokers can already provide services to retail investors and high-net-worth individuals when an overseas derivative is comparable to a product in the domestic market. Overseas crypto derivatives can differ in structure and risk by market, so the plan is to set separate standards tailored to digital assets.

The regulatory overhaul also ties in with steps taken earlier this year to expand the range of eligible underlyings for derivatives. In a notice in March, the Securities and Exchange Commission added cryptocurrencies and digital tokens to the list of assets allowed as underlyings for derivatives in Thailand. Thailand's crypto derivatives framework is therefore moving toward expanding both product scope and investment channels.

Authorities are also discussing detailed terms of contracts based on cryptocurrencies and digital tokens with the Thailand Futures Exchange. That means the discussion on opening overseas products and designing domestic market products is moving ahead at the same time. Even if market access is allowed, key variables for implementation are what types of contracts will be permitted and how similar they must be to domestic products.

Public consultation will run until Sept. 30. The effective date for the proposed rule revision has not yet been set. Whether retail investors will actually gain a path to invest in overseas crypto derivatives will depend on the consultation results and the final rules.