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SEC

The Thai Capital Market Development by Dr. Prasarn Trairatvorakul Secretary-General Securities and Exchange Commission at The Monthly Economic Discussion Bank of Thailand 2 March 2001. SEC. Figure 2: Capital Mobilization (1993 - 2000). Bank Loans. Equity Market. Debt Market.

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SEC

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  1. The Thai Capital Market Development by Dr. Prasarn Trairatvorakul Secretary-General Securities and Exchange Commission at The Monthly Economic Discussion Bank of Thailand 2 March 2001 SEC

  2. Figure 2: Capital Mobilization (1993 - 2000) Bank Loans Equity Market Debt Market Mil. Baht 1,500,000 1,000,000 1,204,269 500,000 793,117 762,757 604,863 512,592 0 -296,785 -105,879 (up to June) -821,272 -500,000 -1,000,000 1993 1994 1995 1996 1997 1998 1999 2000

  3. The Thai Capital Market Development SEC “ That these markets exist at all is almost magical. Investors pay enormous amounts of money for completely intangible rights, whose value depends entirely on the quality of the information that the investors receive and on the honesty of other people, about whom the investors know almost nothing. This magic does not appear in unregulated markets.” by Prof. Bernard Black 4

  4. The Thai Capital Market Development SEC Today’s presentation I. Thai SEC’s mission; strategic goals; principles of good regulation. II. Some reform measures that have already been taken. III. Some additional agenda. 5

  5. The Thai Capital Market Development SEC I SEC’s Mission “Developand supervise the Thai capital market to ensure itsefficiency, fairness, transparency and integrity.” 6

  6. The Thai Capital Market Development SEC SEC’s Strategic Goals 1. Capital Mobilization: Develop the Thai capital Market to become another prime alternative for investors and issuers. 2. Investors: Empower investors. 7

  7. The Thai Capital Market Development SEC SEC’s Strategic Goals 3. Intermediaries and Market: Enhance market prudence and stability. 4. Organization: Develop SEC to be a transparent, understanding and up-to-date regulatory organization with firm and fair law enforcement. 8

  8. The Thai Capital Market Development SEC SEC’s Principles of Good Regulation 1. Facilitate the Thai capital market’s competitiveness as well as remove any obstacles that may hinder financial innovations. 2. Promote roles of investors in terms of their responsibilities and protection of their own rights. 9

  9. The Thai Capital Market Development SEC SEC’s Principles of Good Regulation 3. Emphasize responsibilities of company’s directors. 4. Evaluate the cost and benefit of regulations before being implemented. 10

  10. The Thai Capital Market Development SEC SEC’s Principles of Good Regulation 5. Allocate the most efficient and economic use of available resources. 6. Be aware of potential effects as a result of implementing measures. 11

  11. The Thai Capital Market Development SEC II Reform measures already taken 1. Corporate Governance of Public Companies. 2. Securities Businesses. 12

  12. The Thai Capital Market Development SEC II Reform measures already taken 1. Corporate Governance of Public Companies. 1.1 Transparency & Disclosure • 20 new Thai accounting standards in consistent with IAS • monitoring work of auditors 13

  13. The Thai Capital Market Development SEC II Reform measures already taken 1. Corporate Governance of Public Companies. 1.1 Transparency & Disclosure • amendment of disclosure rules • review of annual filing reports • training program • dissemination of disclosure reports 14

  14. The Thai Capital Market Development SEC II Reform measures already taken 1. Corporate Governance of Public Companies. 1.2 Accountability of Management 1.3 Shareholders’ Rights 15

  15. The Thai Capital Market Development SEC II Reform measures already taken 2. Securities Businesses 2.1 Liberalization of foreign ownership in financial institutions 2.2 Liberalization of securities brokerage commission fee 2.3 New Technology 2.4 Flexibility for securities business management 16

  16. The Thai Capital Market Development SEC III Some Additional Agenda 1. Bond Market Development 2. Stock Market Development 3. Investor Education 4. Financial Architecture 5. Major Laws Reform 17

  17. The Thai Capital Market Development SEC III Some Additional Agenda 1. Bond Market Development 1.1 Tax impediments. 1.2 Inter Dealer Broker (IDB) license. 1.3 Support establishment of the second credit rating agency. 18

  18. The Thai Capital Market Development SEC SEC III Some Additional Agenda 2. Stock Market Development 2.1 Increase Supply 2.2 Demand Enhancement 2.3 Improve Market Infrastructure 19

  19. The Thai Capital Market Development SEC SEC III Some Additional Agenda 2. Stock Market Development 2.1 Increase supply - facilitate privatization of state enterprises - support establishment of ETF - support non-listed companies to prepare for listing on the SET. 20

  20. The Thai Capital Market Development SEC III Some Additional Agenda 2. Stock Market Development 2.2 Demand Enhancement - support issuance of Non-Voting Depositary Receipt (NVDR). - support establishment of Retirement Mutual Fund (RMF). 21

  21. The Thai Capital Market Development SEC III Some Additional Agenda 2. Stock Market Development 2.3 Improve Market Infrastructure - clearer division of roles between SEC and SET. - corporatization of SET. 22

  22. The Thai Capital Market Development SEC III Some Additional Agenda 3. Investor Education - Investor education Program - SEC’s website (www.sec.or.th) 4. Financial Architecture 23

  23. The Thai Capital Market Development SEC III Some Additional Agenda 5. Major Laws Reform 5.1 Amendment to SEC Act 5.2 Amendment to Public Limited Companies Act 5.3 Derivative Bill 5.4 Class Action Bill 5.5 Trust Bill 24

  24. For more information, please contact us at info@sec.or.thorhttp://www.sec.or.thTel. 252 - 3223 ext. 1613, 1619

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