To attain the SEC’s mission to develop and supervise the Thai capital market to ensure efficiency, fairness, transparency and integrity, the SEC exercises administrative and criminal sanctions against wrongdoers. The enforcement action emphasizes due process of law to ensure that it is legitimate whereby the exercise of the enforcement authority is based on the provision of law and supporting evidence and also takes into account the right of the alleged person to present evidence and explanation against the accusation (right to be heard).
Thus, the procedure can assure investor confidence in the Thai capital market and support development and sustainable growth of the capital market as well as the national economy.
In practice, the SEC is always committed to complying with the provisions of laws under its supervision and, as a state agency, authorized to exercise the administrative power in connection with its supervisory role and thus subject to the Administrative Procedure Act of 1996 in case of administrative sanction.
For criminal sanction, the SEC’s duty is in the preliminary stage of criminal justice administration where it exercises statutory power to gather evidence and investigate the matter suspected to be in contravention of laws under the SEC’s supervision. The SEC, nonetheless, has no power to initiate criminal proceedings against the wrongdoers in its own name but has to refer the case of violation of non-compoundable offences with sufficient evidence to the competent inquiry officer for further investigation.
The check and balance mechanism has been put in place, i.e. appointment of the Audit Committee and the Office of the Internal Audit. The Audit Committee has a broad range of duty that covers not only review on the SEC’s financial statements and information but also review and giving opinion to the SEC Board on the SEC’s internal control system, compliance with statutory provisions, rules and regulations, supervising the SEC’s internal audit unit and undertaking other duties as assigned by the SEC Board.
Under the SEC structure, an enforcement committee comprising the executive officers (except the Secretary-General) and departmental heads has been set up to give opinion whether the matter in consideration is deemed a contravention of law before proposing to the Secretary-General for approval. Where technical issues are involved, the SEC regularly appoints external experts such as auditor and financial advisor to give their professional opinions in support of the SEC’s action.
To increase efficiency of the SEC’s enforcement action and to be in line with capital market regulators in the international arena, the SEC has proposed amendment to the Securities and Exchange Act of 1992 to include civil sanctions. The draft legislation is under consideration of The National Legislative Assembly.