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Workplans for 2016-2018
Workplans over the next few years consist of continued implementation on-going or long-term projects as well as a number of issues which may require further adaptation or a changed approach.  Furthermore, there are also preparations necessary to meet new trends and demands.
 
External factors that would impact supervision and development of the capital market over the next three years
As we formulate future workplans, an analysis of the long term outlook for the global economy and capital markets points largely to a continuation of the same trends we observed in 2014.  The world’s economies and financial markets are still very inter-connected and capital flows will remain volatile.  New regulations will tend to be extra-territorial rules and capital markets will still be of prime importance for economies to mobilize capital.  The quest for higher returns will remain a key objective, while technology will advance in leaps and bounds.  Expected changes over the next few years with significant potential impact on capital market policy are:
 
Inter-connected global economies and capital markets.   Globalization has made it much easier to conduct cross-border fund mobilization and investing, creating opportunities for the Thai capital market to benefit from the vibrancy of the Greater Mekhong Subregion (GMS) economies.
 
Capital markets worldwide are highly competitive.   Stock markets across over the world are each seeking global recognition by trying to position themselves as financial centers or gateways to their respective countries.  They are also keen on boosting competitiveness through means such as alliances, connectivity with other markets, and joint investments to raise efficiency and lower costs to entice investors and issuers.
 
Financial Technology (FinTech) FinTech is sweeping across many countries and highly disruptive to traditional types of financial services. The landscape of the financial services industry is being transformed, notably with new service providers deploying technology to drive how products and services can better target customers.  Simultaneously, segments previously unserved can now access financial markets at reasonable costs.
 
The capital market will be an important funding channel for SMEs or strategic sectors. Market regulators all over the world are challenged by the need to widen their role to help facilitate new means of fund mobilization to assist SMEs or strategic sectors deemed vital for the country’s development.  This means helping these sectors access funding easily and swiftly, at reasonable costs relative to their risks without compromising proper investor protection.
 
Aging society.  An aging society demands greater need for savings to prepare for retirement, particularly in Thailand’s case where the situation will be relatively more pronounced.  Failure to adequately prepare can lead to social problems and pressure on public finances in the long term.
 
Blockchain Technology.   As financial transactions can be conducted safely at low cost without the need for an intermediary, technology has the potential to change the face of stock markets, settlement, and delivery.
 
Sustainable Development and Social Responsibility.     Globalization, technology, and market mechanisms produce tremendous growth for production and consumption, but at the costly expense environmental deterioration.  Sustainable development therefore serves as a conscience to remind businesses not to solely focus on financial gains.  Doing so could worsen risks for the economy, society, and the environment, which eventually threatens the longevity of businesses and the capital markets themselves.
 
SEC Strategic Plan 2016-2018
 
Workplans for the next three years stem from the SEC’s careful consideration of the global outlook, the country’s own strategic direction, and structural deficiencies of the Thai capital market, as well as insights revealed by renewed probing of problem issues or consultations with stakeholders.  The ultimate aim is for a capital market that is trustworthy, efficient, accessible by all segments and capable of helping stakeholders achieve their missions.  Supervision must be conducted using appropriate measures.  The various elements of the Strategic Plan will not only rely on issuing regulations but employ softer-side regulations too.  These include consultative sessions, open communications, and the convincing of stakeholders to advance together for our collective growth and sustainability.
 
The Strategic Plan 2016-2018 consists of four strategies described below.
 
Strategy 1:  Manage structural problems to strengthen the capital market’s integrity
 
This strategy is further segregated into three sub-strategies to strengthen the structure of important mechanisms in the capital market such as fund mobilization of listed companies, securities trading, and the marketing of financial products.
          Strategy 1.1 Strengthen the ecosystem involving listed companies
Intended Outcome:  The quality of listed companies improves.
 
Important measures to implement
 
- Aim to foster CG in substance by laying the proper foundations necessary.  Integration of CG/ESG (Environment, Social and Governance) into a company’s business processes will put good governance into practice.  Encouragement of target companies can promote buy-in from the directors who are major shareholders.
- Provide knowledge and awareness to the chief financial officer, accountants, internal auditors, and audit committees.  Also provide regulations and knowhow to instill a greater sense of responsibility to prepare financial reports that are of higher quality.
- Raise the caliber of auditors through collaboration with the Federation of Accounting Professions to advise companies on how to adopt new accounting standards. Approval of auditors will also be revised to quicken the process.
- Encourage investors to incorporate CG/ESG into their investment decisions; amend regulations to support shareholder rights.
- Tighten supervision of financial advisors (FA) where firms must obtain a license rather than just seeking approval to start a financial advisory business.  This will lift standards and give the SEC to wider range of appropriate enforcement tools.
- Require lead underwriters to perform a due diligence on the operations of FA to confirm familiarity with the quality of the securities.  Additionally require that auditors submit financial audit results to the FA to assist their work.
- Encourage the disclosure of information from the prospectus and Form 56-1 to investors in an easily accessible manner and a presentation format that is easy to understand.
- Encourage the SET to revise listing requirements such as taking into account the quality, potential growth, and market value of the securities to create listing segmentation.
- Encourage the SET to toughen regulatory enforcement on companies that no longer meet required qualifications (delisting requirement).
- Review the supervision process.  Cooperate to oversight of listed companies more effectively with the SET to address any loopholes or overlapping work, and make use of the best tools.
             Strategy 1.2   Strengthen the securities trading ecosystem
Intended Outcome:  The SET and Association of Thai Securities Companies’ operations achieve international standards and uphold public interest. 
Important measures to implement
 
- Communicate with Association of Thai Securities Companies to emphasize clarity of their roles particularly if they want to be Self Regulatory Organizations (SRO).  It is vital that they make necessary preparations regarding staffing and supervisory capacity to lift operational standards to international levels.
 
- Collaborate with the SET and securities companies to install preventive measures against unfair securities trading activities.
 
- Strengthen the capacity to effectively deal with wrongdoers by improving operations, classifying cases in terms of severity, and boost efficiency of supporting operations to investigate and file legal charges more swiftly.  Backlogs of pending cases should be minimized as well.
                        Strategy 1.3   Strengthening the ecosystem of the offering of financial products
Intended Outcome:  Investor confidence in the financial products.  Uphold investors’ best interests.
 
Important measures to implement
 
- Collaborate with the Bank of Thailand (BOT) to monitor the product pricing structures of financial conglomerates to prevent mispriced financial products being offered to the public.
 
- Ensure benchmarks and performance presentations are in accordance with international standards.
 
- Improve information disclosure and service standards of firms with limited broker, dealer and underwriter (LBDU) licenses, and underwriters.  Strengthen sales conduct and processes to ensure investors receive proper information.

            Strategy 2:  Raise the competitiveness and international profile of the Thai capital market
Two sub-strategies will be directed at increasing the effectiveness and competitiveness of business operators in both the domestic and international markets.
           Strategy 2.1  Improve the landscape to foster healthy competition in the capital market
 
Intended Outcome:  A capital market that consists of players that offer financial products meeting the needs of customers and qualified to compete among foreign players.
 
Important measures to implement
 
- Update regulations to permit securities companies to introduce a wider variety of financial products and services.
 
- Encourage asset management companies to develop more types of funds or invest in new types of assets.
 
- Encourage more research analysis of traded stocks and facilitate those who are keen to conduct research analysis.
 
- Smoothen the landscape to accommodate new players running new business models by revising the structure of licenses, minimum capital requirements, and regulations to permit the creation of new services to cater to investors’ needs.
                       Strategy 2.2  Build the Thai capital market’s international profile
                       
Intended Outcome:  Position the Thai capital market as a funding gateway for businesses in the GMS region as well as a center for investors intending to invest in GMS.
 
Important measures to implement
 
- Collaborate with stakeholders to position the Thai capital market as a hub for investment in GMS-related financial products.  Also help develop GMS stock markets grow in tandem.
 
- Carry out on-going improvements to achieve the standards laid out by IOSCO principles and ensure operations are in accordance to standards, regulatory guidelines, and cooperation agreements made with key supervisory bodies such as APEC, ARFP, AIFMD and other bilateral agreements.

Strategy 3:  Facilitate businesses and the public to access and benefit from the capital market  
            
Strategy 3.1  Facilitate businesses to access and benefit from the capital market
                   
Intended Outcome:   Companies can mobilize funds from the capital market at competitive costs.
 
Important measures to implement
 
- Boost new channels to mobilize funds such as infrastructure funds and project-finance bonds.
 
- Support and equip SMEs with the ability to deploy tools available in the capital market by (1) boosting their knowledge and use of existing fund mobilization channels through equity crowdfunding, private equity trust, etc., (2) exploring the feasibility of permitting debt crowdfunding, and (3) supporting greater use of technology in the management of SMEs.
 
Strategy 3.2  Encourage savings for retirement
 
Intended Outcome:  A well-managed provident fund industry that provides financial security for members upon retirement.
 
Important measures to implement
 
- Configure proper minimum level of savings needed to achieve adequate financial security upon retirement.  Provide availability of Life Path investment plans that adjusts to age.  Provide members with availability of investment options.
 
- Permit asset management companies to offer a wider range of investment policies for members’ excess savings.
 
- Provide knowledge to provident fund committees and members to stimulate interest in managing provident funds effectively.
 
Strategy 3.3  Encourage stakeholders in the capital market to be prepared, up to date, and capable of benefitting from technology
 
Intended Outcome:  FinTech provides services to investors while associated risks are managed effectively.
 
Important measures to implement
 
- Organize FinTech forums and administer programs to provide knowledge and invite FinTech startups to develop new types of businesses and services to investors.
 
- Issue regulations to facilitate new businesses created by FinTech.
 
- Support the SET and intermediaries to place high priority on the effective prevention of cyber risk.
 
Strategy 4:  Strengthen the SEC’s ability to sustainably achieve its vision and mission
 
Strategy 4.1   Reinforce the SEC’s management framework with the integration of governance, risk, and compliance (GRC) into the organization’s operations.
 
Intended Outcome:  SEC is managed in accordance with international standards.
 
Important measures to implement
 
- Establish processes for the formulation of strategic plans, leading to actual implementation and achievement of intended outcomes as envisioned by the organization’s vision and mission.
 
- Establish management policies in line with international practices, whereby risk management is integrated into decision-making and all other function lines.
 
Strategy 4.2  Strengthen corporate culture and human resources
 
intended Outcome:  The SEC has a knowledgeable, competent, and loyal workforce.  
 
Important measures to implement
 
- Maintain proper workforce to handle workload and perform operations effectively.
 
- Skills development training and establishment of succession plan to cope with retirements.
 
- Leadership development for executives to develop coaching skills and serve as real drivers in the organization.  Implement activities to strengthen the corporate culture as outlined by corporate values.
 
Strategy 4.3  Increase the efficiency of work operations
 
Intended Outcome:  SEC’s operations contain risk-awareness and keen to respond to stakeholder needs.
 
Important measures to implement
 
- Build alliances between supervisory bodies and the financial market to formulate strategies together.
 
- Reduce the burden on intermediaries by updating rules and regulations to match the investment environment.  Reduce unnecessary requirements and strengthen the capital market’s competitiveness.
 
- Increase risk surveillance capacity and aim to develop a sophisticated executive dashboard that enhances management of organizational risks and threats to the Thai capital market from various events.
 
- Adjust work approach to increase consideration for stakeholders and responsiveness to their needs.
Strategy 4.4    Strengthen data management capabilities and keep up with IT technology
 
Intended Outcome:  SEC is adept at utilizing data and technology to formulate effective policy-making.
 
Important measures to implement
 
- Implement database and management information system using data analytics to extract intelligent information to support policy-making.
 
- Establish guidelines to enable departments to monitor and manage their own IT and cyber security matters.
 
- Plans to prepare IT specialists to handle the supervision of the increasing presence of IT-driven business services being set up to tap customers.
 
- Apply greater use of IT technology to enhance the operations of the SEC to improve our services to stakeholders.
 
Strategy 4.5  Efficient resources management
 
Intended Outcome:   SEC has solid financial standing and does not burden the private sector.
 
Important measures to implement
Judging from prevailing external factors and the investment environment, priority needs to be placed on sufficient capital, fee revenues, and expenses.  The following measures will be implemented.
 
- Conduct stress tests on capital base to ensure sufficiency to cope with market volatility, yet capital base should not be overly excessive (overcapitalized).
 
- Set fee structure that enables the industry to remain competitive while appropriately covers the SEC’s efficient use of resources.
 
- Budget expenses must be in-line with the strategic plan.
Successful implementation of these strategies to accomplish our mission will require a collaborative spirit among all parties involved for the sustainable growth of the Thai capital market.  The SEC is fully committed to being open to feedback, whilst undertaking thorough examination and analysis of issues to be insightful.  We will base our operations on integrity and uphold the interests of the public.
Last updated on 25 May 2016
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