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Published on August 14, 2007

Broker-deal supervision department director Duangmon Chuengsatiansup, who prior to this month was head of the investment-management supervision department, said an SEC subcommittee had approved the idea and it was now awaiting approval from the board.

The SEC currently limits mutual-fund companies' investment in REITs to 15 per cent of the fund's net asset value.

REITs are globally known as publicly traded trusts that hold title to real-estate assets and pass the income stream from these assets along to the trust holders (the equivalent of shareholders). Equity REITs usually specialise by property type, such as apartments, retail shopping centres, commercial office buildings and healthcare facilities.

The expected approval is in line with financial authorities' recent policy to encourage local investors to diversify their portfolio with overseas investments.

However, there has been no pressure from asset-management firms regarding property investment overseas, Duangmon said.

"Some mutual-fund companies consulted us about the regulations, but so far there has been no urgent case seeking REIT investment," she said.

Duangmon added that in terms of asset class, asset-management companies were free to invest in all classes, both domestically and internationally.

She said the SEC had held talks with the Bank of Thailand to ask for a US$10 billion (Bt340 billion) quota for mutual funds, provident funds and securities firms to invest in abroad.

Another issue under discussion is allowing individuals to invest overseas through brokerage firms. Currently, individual investors can invest abroad only through private funds.

"The Bank of Thailand agreed with the idea initially. The central bank requires only that the amount of capital outflow is clearly identified," Duangmon said.

Piyarat Setthasiriphaiboon,

The Nation