Chapter 4
Securities Business
 
Division 8
Private Fund Management
 
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Section 133.
 
 
The securities company shall manage a private fund with honesty and care to preserve the interests of the person who has authorized the management of the private fund, using knowledge and competence as a professional.

The securities company shall enter into a written agreement with a person or a group of persons who has authorized the securities company to manage the private fund, and shall manage the private fund in accordance with the rules, conditions and procedures as specified in the notification of the SEC. In this regard, the SEC shall have the power to specify the particulars which are material to the agreement.
(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 134.
 
 
In managing a private fund, the securities company shall provide a private fund manager with the approval of the Office in accordance with the rules, conditions and procedures as specified in the notification of the SEC.

The provisions of the first paragraph of Section 133 shall apply mutatis mutandis to the performance of the private fund manager.
The private fund manager shall manage the private fund in accordance with the rules, conditions and procedures as specified in the notification of the SEC.
The Office shall have the power to revoke the approval for a private fund manager who fails to comply with the provisions of the second paragraph or the third paragraph.
(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 135.
 
 
In the management of a private fund, the securities company shall arrange for the appointment of a custodian with an approval of the Office in accordance with the rules, conditions and procedures specified in the notification of the SEC.

The securities company may act as a custodian for the person who has authorized it to manage the private fund for which it is responsible, upon the consent of the person so authorizing and approval of the Office,in accordance with the rules, conditions and procedures specified in the notification of the SEC.
(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 136.
 
 
The securities company shall segregate the assets of the person authorizing the management of the private fund from its assets, and in the event that the securities company is not a custodian of the person authorizing the management of the private fund for which it is responsible, the securities company shall deposit the assets with the custodian approved under the first paragraph of Section 135 within the business day following the day on which the securities company received such assets or within the time specified in the notification of the Office.

(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 137.
 
 
In accepting assets into custody, the custodian shall segregate the deposited assets from its own assets, and shall deal with the deposited assets in accordance
with the rules, conditions and procedures specified in the notification of the Office.
Any custodian who fails to comply with the provisions of the first paragraph shall be subject to revocation by the Office of the approval granted for such custodian.
(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 138.
 
 
All assets of the person authorizing the management of the private fund shall be in the name of the person authorizing such management and the name of the securities company as the representative, unless otherwise permitted by the Office in accordance with the rules, conditions and procedures specified in the notification of the Office.
(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 139.
 
 
In managing a private fund, the securities company shall be prohibited from
(1) investing in any assets for the person authorizing the management of the private fund other than those agreed upon in the agreement authorizing the management of the private fund;
(2) accepting fees or any service charges from the person authorizing the management of the private fund, except for fees or service charges specified at the rate and according to procedures in the agreement authorizing the management of the private fund;
(3) purchasing or selling assets in its own name with the person authorizing the management of the private fund without giving prior notice;
(4) making a representation to the person authorizing the management of the private fund that there will be a profit or return at a certain rate or promising that the loss shall not be more than the rate already specified, except for a representation or warranty given in accordance with the rules, conditions and procedures as specified by the notification of the Office;
(5) doing any other act that may cause a conflict of interest as specified in the notification of the Office.

(As amended by Section 6 of the Securities and Exchange Act (No.2) B.E. 2542)
 
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Section 140.
 
 
The securities company shall prepare an account showing the financial condition of each private fund in the form specified in the notification of the Office and shall keep the supporting documents which evidence the correctness of such account.
In managing a private fund of the nature specified by the notification of the Office, the securities company shall prepare financial statements of the private fund pursuant to its actual conditions, and shall comply with the rules, conditions and procedures specified by the notification of the SEC, which shall take into account the standards approved by the Board of Auditing Practices under the law relating to auditors.
The financial statements under the second paragraph must be examined and given opinion by an auditor approved by the Office, and such auditor must not be a director, staff member or employee of such securities company.
The auditor of the private fund must adhere to the code of conduct and perform the auditing to provide opinion on the financial statements in compliance with the requirements of the law relating to auditors and additional requirements as specified in the notification of the SEC.
In the case where the securities company prepares the supporting documents for entry into accounts or disclose information in the financial statements inaccurately or incompletely, the auditor shall disclose the facts and material impact on the financial statements in his audit report on which he is to sign in order to give his opinion.
Any auditor who fails to comply with the provisions of the fourth paragraph or the fifth paragraph shall be subject to revocation by the Office of the approval given for such auditor.