SEC boss targets regulatory loopholes

Meanwhile, a new regulation on the selling of private placement (PP) equity will be finalised within three to four weeks, while the work to close loopholes and the readjustment of the measures to regulate stock speculation are expected to be more tangible within three months.

“We really need more investors in the capital market, because investment in other assets, such as savings [accounts] and bonds, do not provide that much return, and as we are entering an ageing society, we need more people to have enough savings for their retirement years in order to lower the state’s burden in the future,” said Rapee Sucharitakul, who took office as SEC secretary-general a month ago.

There are currently about a million retail investors in the capital markets, but only about 100,000 are active. The number of people who invest in mutual funds is around 3 million. The SEC will try to increase these numbers by focusing on people of working age, between 30 and 40. 

Rapee said yesterday that the SEC would improve its communications with investors on the drafting of any new regulations from now on in order to ensure that such rules actually provide the needed solutions.

“With 10 years’ experience working in private companies, I think that I can be a bridge between the understandings of SEC people and private companies,” he said. 

Under the refocusing plan, the commission will pay more attention to the results rather than the process, as getting satisfactory responses from the people involved is more important, Rapee said.

“All the plans we create should be practical, and information technology is to be utilised in order to manage risks,” he said.

Regulations to cover new products such as high-yield bonds and higher-risk mutual funds along with the introduction of a hedge fund in Thailand are in the pipeline as the SEC tries to attract new investors from abroad, and these products have been requested by investors.

“The SEC regulations regarding the selling and buying of assets, the acceptance of assets by the exchanges, and the provision of margins and loans to buy stocks will be re-examined to find loopholes and prevent stock speculation. We are working with the Stock Exchange of Thailand in order to come up with a tangible framework within three months,” he said. 

He said the problem regarding the selling of PP equities at unusually low prices was on the SEC’s radar. It will try to prevent harm to stakeholders such as by providing more information so investors understand that commercial banks do not provide guarantee for such transactions as claimed by some companies. 

More details on the new regulations will be provided in three weeks.

Rapee also agreed with the government’s plan for state-owned enterprises to raise funds within the capital market. He said there was no need to introduce any new regulations to support such a development, and the SEC was working with the State Enterprise Policy Office to introduce a bill to cover listing of SOEs within the capital market, which is expected to be finalised by next month.