Bank of Thailand seeks to allay fears on bond rules

Global funds will continue to have unfettered access to Thai bonds even when a rule on registration takes effect, the central bank said as it sought to allay concern the regulation could be used to curb speculative flows.

The proposal, which will kick off in October, requires foreign funds to open segregated onshore accounts instead of relying on omnibus facilities from international clearing firms such as Euroclear Ltd. This would enable officials to identify the ultimate holder of the nation’s bonds, doing away with the anonymity provided by global depositories which tend to combine transactions.

The regulation will help officials understand investors’ behaviour, and isn’t intended to limit trading and speculation, Bank of Thailand Assistant Governor Vachira Arromdee said in a March 22 email interview. Policy makers don’t have a target for foreign…