A tougher SEC records huge spike in fines
THE SECURITIES and Exchange Commission (SEC) has sharpened its teeth as the country’s top capital-market regulator by speeding up criminal sanctions against rule breakers.
In the first half of the year, fines imposed by the SEC jumped more than 10 fold when compared to the same period last year.
According to SEC data, from January to June fine payments totalled Bt492 million as part of settlements between wrongdoers and the SEC, compared to only Bt34 million in the same period last year.
For the whole of 2015, fine payments totalled Bt91 million.
SEC secretary-general Rapee Sucharitakul told The Nation that the market regulator, the overseer of the Stock Exchange of Thailand and other capital markets, had committed to more specific timelines in various cases, resulting in faster criminal sanctions including hefty fines.
According to SEC data, the biggest fine in the first half of the year amounted to Bt447 million and was imposed on nine people for manipulation of UMI stock in 2013.
The SEC also imposed a fine of Bt33 million on several executives of CP Group found guilty of insider trading relating to shares of wholesale store chain Makro.
The SEC investigation found the executives illegally used insider information, which was not disclosed to the public, to buy shares of Makro in April 2013 when CP All – a listed unit of CP Group – was in the process of acquiring a majority stake in Makro in a multibillion-baht deal.
The SEC also imposed a fine of more than Bt8 million on a listed company’s executives who abused insider information to trade shares of Diphaya Insurance.
Rapee, however, declined to comment specifically on these controversial cases, but noted that the SEC had accelerated its internal processes in handling criminal complaints and sanctions by removing bottlenecks.
He said social media was playing a bigger role in helping create wider public awareness about the rules and regulations of the capital market, especially with regard to stock manipulation and abuse of insider information.
Besides hefty fines, industry sources said those found to have |violated the rules received some form of social sanction, as in the |case of CP Group and other |company executives who faced social media calls to quit after being hit with the SEC’s criminal sanctions.
In a bid to help executives of listed companies improve their handling of confidential and market-sensitive information, the SEC has distributed copies of a manual on the principles of good practice to firms.
The manual, based on guidelines used by the Governance Institute of Australia, urges listed firms to implement internal measures to prevent leak of confidential in-|formation and abuses while stressing that there should be confi-|dentiality agreements with persons who have access to that data.
Besides stock-market trading, the SEC is also tasked with approving and regulating equity securities offered to the public, including initial public offerings of stocks and warrants as well as debt securities offerings and asset management businesses such as mutual, provident, property and infrastructure funds.
The equity capital market is worth about Bt14 trillion while the debt securities market is valued at about Bt4 trillion.
