Bangkok, The SEC has issued an announcement supporting new conditions for Thai ESG funds by expanding the investment scope and promoting the role of asset management companies in using fiduciary duty for responsible investment.
As the Cabinet meeting on July 30, 2024 resolved to approve the adjustment of tax measures to promote investment for Thailand’s sustainability through the Thai Sustainable Investment Fund (Thai ESG Fund) as proposed by the Ministry of Finance, which includes expanding the amount of income tax deduction to 300,000 baht per person per year and reducing the holding period of investment units to 5 years for purchases of investment units between January 1, 2024 and December 31, 2026 to drive the Thai capital market, enhance confidence, and support long-term investment in the capital market. The Ministry of Finance will evaluate the results of this tax benefit at the end of the 3-year measure period.
The Securities and Exchange Commission (SEC) has therefore revised the relevant criteria
to support such measures by expanding the investment scope of Thai ESG funds, emphasizing the role of asset management companies in using fiduciary duty for responsible investment.
Mrs. Pronong Busaratrakul, Secretary-General of the SEC, revealed that the Capital Market Supervisory Board (SEC) at its 7/2567 meeting on July 16, 2567, resolved to approve the principles of the improvement of the Thai ESG Fund criteria to support the government’s savings and investment promotion measures in 2 important matters as follows:
Expanding the investment scope, improving the criteria to
(1) allow funds to invest in stocks with ESG standards based on assessments by a wider range of organizations, in addition to referencing SET ESG ratings, as an alternative for management companies to use as a reference for investment. However, such organizations must have assessment standards that are internationally accepted.
(2) Adding an alternative for funds to invest in stocks with excellent corporate governance, disclosing goal
s and corporate value-up plans, reporting progress in implementing the plan, and having a plan to upgrade environmental performance, as well as communicating such actions to investors at least in accordance with the specified criteria.
Strengthening the role of asset management companies in managing Thai ESG funds, whereby asset management companies must exercise caution and take responsibility for the benefit of unitholders (fiduciary duty) in considering ESG factors, from setting investment policies and strategies, selecting and monitoring investments in quality businesses for sustainable investment in accordance with the objectives of Thai ESG funds.
The announcement regarding the amendment of the criteria for Thai ESG funds is expected to be published in the Royal Gazette and will come into effect within August 2024. Investors can immediately invest in existing Thai ESG funds using the new tax benefits, and the SEC will coordinate with relevant parties to facilitate and prepare asset management companie
s that intend to establish Thai ESG funds under the new conditions or amend existing projects to increase investment flexibility under the new criteria.
The Thai ESG Fund must disclose information on the sustainability of the mutual fund in accordance with the criteria of the Sustainable Investment Fund (SRI Fund) to provide investors with sufficient information to make investment decisions. This fund will be exempted from the application fee for establishment and amendment of the project from the SEC, like the SRI Fund, throughout 2024.
Source: Thai News Agency