Rapee to get the most out of existing market regulations
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THE SECURITIES and Exchange Commission (SEC) will focus on effectively enforcing existing regulations to achieve its intended target rather than issuing new ones, its newly appointed secretary general said yesterday.
Rapee Sucharitkul, 54, the agency’s sixth secretary general, said in an exclusive interview with the Nation Group that the regulator of the capital market needed to review all the existing rules to make sure they are workable.
In the meantime, the focus will be on issues not directly related to the capital market, such as “educating investors” to achieve what the regulator intends.
After three months in office, Rapee has worked out with his staff and executives of the capital market and related organisations four principles – insightful, open-minded, cooperation, and integrity – in efforts to understand what involved parties need to develop in the Thai capital market.
After six years working in private firms, especially being executive chairman at Kasikorn Securities Plc, Rapee understands how to balance regulatory intervention with private discretion to outline what can and can’t be done within the rules.
Before 2009, he joined SEC after working at the legal department of the Bank of Thailand. His last post at SEC at that time was as senior assistance secretary-general.
“We have to analyse which rules should be doing more or less…these will be also part of being outlined as the three-year capital market development plan from 2016-2018,” said Rapee.
For example, he said regulators are like security guards who have never driven a car and try to give car drivers directions to turn left in a way that none of them can do. That is like the SEC, which is a regulator that has never done business but stipulates the rules for business people.
Rapee said the regulator, hence, would have to question why that doesn’t work.
Another example would be the prospectuses of new initial public offering shares. The more information they are forced to disclose, the less investors read it.
“Regulations, when issued, will have to be measured. Otherwise, it won’t work,” he said.
As for manipulation of the stock exchange, Rapee said it seemed to be the evolution of old-fashioned wrongdoing, the format of which |is not different except for the channel, which was changed by technology.
Rapee said changes in the |ecosystem and investor behaviour would also be big challenges for the regulators in terms of directing which way the capital market will be.
In terms of investors, he said the big problem is that we are under a lowering return rate across the world and that will stay with us for a long while. The huge risk is that there will nowhere to put money to have enough returns. A safe place to in-vest with high returns no longer exists, he said. If the investment is safe, the returns will not be enough for living.
Rapee said the solution is to have more products such as hedge funds issued by Thai asset management firms. Initially, these kinds of products may be limited to institutional investors. In the long term, non-institutional investors should eventually be allowed to invest in these products directly and conceptually. Otherwise, sellers and issuers will have no learning curve.
“The key challenge is to have the industry prepare to brace for these changes,” said Rapee. The SEC’s major roles for the capital market include the development, protection and suppression.
