Gold funds allowed in Thailand

The Capital Market Development Committee today approved regulations that will allow investment-fund firms to invest directly in gold bullion.

At present, they can only make indirect investment in gold, either through overseas gold funds or gold futures. After a meeting this month, the com?mittee endorsed three forms of direct investment: a simple gold fund that invests in bullion or through financial papers in which prices move in line with gold prices; gold exchange-traded funds (ETFs); and complex gold funds for which returns are specified in special terms. Complex gold funds' returns may move in the opposite direction of bullion price, for example.

Fund companies will be required to specify insurance terms and storage measures clearly.

Gold traders can also be appointed as the selling agents for gold ETFs, while gold-futures brokers can bypass securities firms and directly send sell and buy orders for the ETFs to the Stock Exchange of Thailand's system.

"The regulations on the gold funds and agents are to promote new products as new investment tools for investors. This would also grant access to gold traders in helping develop the industry," said Thirachai Phuvanartnaranubala, secretary-general of the Securities and Exchange Commission and chairman of the committee.