Net settlement ratio 'too low, risky'

A delegation from the Financial Sector Assessment Programme, a joint project of the World Bank and the International Monetary Fund that assesses supervision standards in financial markets, has warned that Thailand's 10-per-cent deposit for intra-day stock-market trading, or net settlement, is too low and considered risky compared with practices in other countries.

Securities and Exchange Commission secretary-general Thirachai Phuvana-tnaranubala yesterday said the delegation had advised the deposit ratio be adjusted to a suitable level.

The joint IMF-World Bank delegation assessed various issues regarding Thailand's financial-market supervision, in order to evaluate whether the Kingdom complied with international standards. The SEC has urged it to continue its assessment of the country's system of payments in stock and debt-instrument trading.

Aside from the capital market, the Bank of Thailand will also come under the joint delegation's scrutiny.

Meanwhile, the Thailand Securities Depository (TSD) is planning this year to focus on developing infrastructure and systems to become an integrated clearing-, settlement- and delivery-service provider for capital and debt instruments and derivatives.

TSD chief executive Sopawadee Lertmanuschai yesterday said his agency would provide payment services for new products, including the Exchange Trade Fund and SET 50 Index Option, to be available in the second and third quarters, respectively.

The depository plans this year to increase the ratio of securities deposited at the centre to 85 per cent and the number of shareholders who use its e-dividend service to 150,000.

In addition, it is aiming at a Customer Satisfaction Index of 78.5 per cent.

The TSD now offers three main services: a securities depository, securities clearing and settlement and securities registration.

Sopawadee said the value of transactions through the TSD's services last year totalled more than Bt660 million, an annual increase of 2.6 per cent.

Last year, the TSD extended a registration service to 152 funds, up from 62 the year before. Ninety-nine of them were provident funds with assets amounting to Bt113.37 billion.

Among new services to be available from the TSD this year are private repo, bond lending and electronic initial public offerings. The new services will accommodate the needs of members and reduce their costs.

Sopawadee said that at present, the TSD had 638 members for securities deposits, 84 for clearing and settlement and 591 for securities registration.

Siriporn Chanjindamanee,

Anoma Srisukkasem

The Nation
Thu, February 1, 2007