SEC given more legal power

“The new amendments will enhance the Thai capital market with more credibility, preventing market misconduct,” Sakkarin Ruamrungsri, assistant secretary-general of the Securities and Exchange Commission (SEC), said yesterday.
The amendments of the Securities and Exchange Act 1992, which was passed by the National Legislative Assembly on September 1, are mainly concerned with preventing market misconduct and introducing a civil penalty in response to more complex wrongdoing.
Under the newly enacted law, Sakkarin said the SEC would be allowed to use the civil sanction as an option in order to end cases in a shorter time than under criminal penalty procedures.
He added that probing insider-trading violations was not easy, but under the new law, the civil penalty provided a choice for enforcement that was likely to be more effective than that of a criminal penalty.
Moreover, the civil penalty procedure in the new law is weightier than before, with wrongdoers being fined triple the benefits gained in connection with their market misconduct, compared to double the amount currently, he explained.
As to the types of market misconduct, the assistant secretary-general said the SEC had clarified wrongdoing in respect to breaches of the law through information disclosure, insider trading, front running and stock manipulation.                        
He said that not only would legal action be taken against executives of listed companies, but also against anyone found to have breached of the law on information disclosure to the detriment of investors and the capital market.
Sakkarin said the new law on insider trading was not limited to those who were management or insiders, but also applied to persons who held and dispersed inside information to other people, known as tippees.
Once a tipper or tippee made use of that information by buying or selling securities in the stock market, either or both parties could be accused of acting illegally.
He said that in regard to stock manipulation, wrongdoing would be classified into different levels depending on the impact on the capital market – and this would in turn result in different penalties.
Moreover, using nominees for stock trading would not be allowed under the new law. Otherwise, |the persons involved would be fined up to Bt100,000 and/or| be sentenced to up to one year in jail.
Borrowing other people’s stock trading accounts, such as those of friends or relatives, for price manipulation would be harder than before, said Sakkarin.
Wrongdoers would be sentenced up to five years in prison for manipulation or for collapsing the market’s trading system, and up to two years for wrongdoing related to such market misconduct.
The wrongdoers could be also banned from trading in the stock market for a maximum of five years, and from becoming a director of a listed company for a maximum of 10 years.
“The contents of the newly amended law have been discussed with participants in the industry via many hearings conducted by the SEC,” he added.