The Thai Securities and Exchange Commission is canvassing opinion about its proposal to change the regulations that govern limitations on unitholding in mutual funds.

At present, the number of investment units held by any person or any associated persons cannot be greater than one-third of the total sold units of a mutual fund. The Government places such limitations on unitholding to ensure that:

• investment units are widely allocated to the general public;
• mutual funds are not exploited for any benefits other than those which ought to be obtained from investments;
• mutual funds are not dominated by large unitholders; and
• there is no so-called 'liquidity impact' from large unitholders’ redemptions.

However, asset management companies have complained that these rules are obstacles to funds that are trying to grow in size and that they also drive up costs. The SEC is proposing to "dissolve associated persons and exempt limitations on unitholding in mutual funds if asset management companies comply with all obligations, such as widely allocating investment units to the general public, managing liquidity effectively, taking steps to obtain unitholding information of the clients or beneficial owners, sufficient disclosure and ongoing monitoring,etc."

Comments must be in by 10 January.