Investors to be offered more foreign funds

Business News - Thursday December 20, 2007

SEC to link with watchdogs

Investors to be offered more foreign funds

KRISSANA PARNSOONTHORN

The Securities and Exchange Commission (SEC) plans next year to link up with more regulatory watchdogs abroad to cope with globalisation and rising competition from the other markets.

''We're now waiting for the passage of the revised SEC Act, so that we will be able to sign a multilateral agreement with other exchange commissions to swap information related to securities wrong-doings,'' said SEC secretary-general Thirachai Phuvanatnaranubala.

The SEC is a member of the International Organisation of Securities Commissions (IOSCO).

The Thai stock market has more links with Asian markets, so regulations in Thailand and the other exchanges would be adjusted to provide convenience for cross-border transactions.

Mr Thirachai, whose four-year term ends on Dec 27, said the SEC would also provide more options for Thai investors wanting to invest abroad.

This started with foreign investment funds, which have gained popularity and success among Thais. Total funds invested in FIFs increased 15-fold to US$6 billion as of Oct 31, 2007 from only US$400 million in 2006.

Moreover, some foreign securities in Asia would be bought in local markets and sold to local investors such as exchange-traded funds, commodities and TCRs.

Mr Thirachai said the SEC would assist the Stock Exchange of Thailand in restructuring its organisation before demutualisation and new supervisory guidelines are imposed.

''We will concentrate on disclosure-based supervising and governing, not a merit-based scheme like before,'' he said.

As well, local brokers and asset management companies would be encouraged to improve themselves to deal with tougher competition and market liberalisation in the near future. Brokerage commissions would be liberalised over the next five years.

Rules and regulations, which can be obstacles to business and affect operation costs, would be relaxed to help brokers and asset managers. Brokers would be pushed to develop new financial products and securities to attract investors, Mr Thirachai said.

The secretary-general also noted that the SEC was looking forward to restructuring its organisation to be free from political intervention through the amended SEC Act. One measure would ensure that the SEC chairman is an industry expert rather than the Finance Minister. Mr Thirachai hoped that the amended SEC Act would pass the National Legislative Assembly under the Surayud-led government.

He also admitted that during his tenure at the helm of SEC the toughest job was investigating Shin Corp and its subsidiaries' shares because the cases were in the public limelight.

''The public has a perception that the SEC has a double standard and helps Shin Group. In fact, all investigations are the same for both small and big companies. We also have our own check-and-balance system and I can't get involved or intervene in the investigation process,'' he said.

Bangkok Post