By Somluck Srimalee
The Securities and Exchange Commission has a five-year plan to make the Thai capital market a regional leader by introducing new rules allowing Asean companies to raise funds in this country's market.
The SEC has also proposed a civil-sanction law to protect investors from insider trading, the commission’s secretary-general, Dr Vorapol Socatiyanurak, said yesterday.
He said the SEC had six strategies to make Thailand’s capital market a source of funds for Asean countries, allowing them to issue debentures, new shares, depositary receipts (DR), and baht bonds, among others.
The first is attaining high regulatory standards on par with internationally accepted standards by launching new rules whereby foreign firms, especially in Asean countries, can raise funds from Thailand’s capital market.
“We plan to launch new rules to allow private firms from Asean countries to issue debentures, new shares or DR or to be dual-listed in Thailand next year,”
SEC deputy secretary-general Tipsuda Thavaramara said. “We are also negotiating with relevant parties such as the Finance Ministry and the Bank of Thailand on revising their rules to go along with this strategy.
“If we want to be a financial hub in this region, we have to provide the opportunity for overseas firms, especially in Asean countries, to raise capital in our market.”
She said the SEC would also launch new regulations on setting up infrastructure trust funds to raise money in Thailand’s capital market to invest in infrastructure businesses in neighbouring countries. The agency is also negotiating with the BOT on relaxing its rules governing Thai firms investing in infrastructure overseas.
The SEC is also negotiating with the Public Debt Management Office of the Finance Ministry on allowing private firms in Asean to issue debentures in Thailand’s financial market. At present, such debenture issues must be proposed to the PDMO case by case.
The second strategy is enhancing the efficiency of preventive measures and enforcement mechanisms in response to technology advancement by revising the Securities and Exchange Act to protect investors from speculators and inside traders more effectively.
To this end, the SEC has asked the Finance Ministry to consider a civil-sanctions law. The Council of State is reviewing this proposal. If approved by the ministry, it will be proposed to the Cabinet and, ultimately, the National Legislative Assembly, SEC deputy secretary-general Vasant Thienhom said.
Such legislation would allow allegations of wrongdoing in the capital market to be filed as civil cases, and not just as criminal complaints or administrative litigation.
“We believe that this act will be effective next year,” he said.
The third strategy is increasing the market’s width and depth to promote it as a regional financial connector for investors in such instruments as baht bonds and DR.
Fourth is promoting market-based financing for all businesses, especially small and medium-sized enterprises and strategic sectors. The SEC plans to open up an SME market for businesses with too little capital to be listed on the Market for Alternative Investment.
Fifth is creating quality investors and promoting financial literacy and knowledge about the capital market among the public to lessen social inequality. This is important as Thailand becomes an ageing society with more and more citizens needing to plan for retirement.
The sixth strategy is enhancing SEC efficiency to attain sustainable growth and drive the success of policy implementation.
Vorapol said: “When we do all of this we will support the country’s long-term economic growth and also make the country a financial hub for this region. When the Asean Economic Community becomes effective in 2015, Thailand will have to [compete] in Asean, and that means making investors interested in raising capital from the Thai market.”