Under Section 4 of the Securities and Exchange Act B.E. 2535, a
"securities underwriter" is "any person who underwrites all
or part of the securities from a company or owner of the securities for sale to
public in return for a fee or other remuneration either with or without any
conditions. " In addition, under Section 90 of the Act, the securities
business mentioned above can be undertaken only after a limited company or a
public limited company or a financial institution established in accordance
with other laws has obtained a license from the Minister of Finance upon the
SEC’s recommendation.
Any person
operating securities business without a license shall be liable to imprisonment
for a term of 2 to 5 years, a fine from Bt200,000 to Bt500,000 and a daily
fine.
For more details and inquiries,
please call the SEC Information Center at 66-2695-9999 or e-mail: seccom@sec.or.th
Being a securities company that has
obtained one or two licenses to operate either as securities broker and/or
securities dealer and/or securities underwriter, and wishes to obtain the
rest;
Not being a financial institution
established under other laws;
Not cross-holding shares of more than 99
percent with another securities firm;
Having a sound financial condition and
performance, estimated from the company’s financial statements of the past
three consecutive years.
Apart from an underwriter license for the
securities company, the law requires that the following associated persons meet
minimum requirements, not possess prohibited characteristics, and either be
approved by or register with the SEC Office as the case maybe:
Major shareholders of more than 10
percent stake (Notification of the Ministry of Finance dated February 23, B.E.
2543 and April 4, B.E. 2545)
Directors, managers, management,
advisors or external persons to whom the securities company contractually gives
the managing power (Section 103 and Section 104 of the Securities and Exchange
Act B.E. 2535, Notifications No. TorThor/Nor/Khor. 57/2552, No.
GorThor/Nor/Khor. 58/2552, and No. OrThor/Nor/Khor/Yor. 6/2548)
One-fourth of directors must be
independent directors (effective from January 1, 2007). (Notifications No.
GorThor. 11/2549
An
underwriter shall segregate subscription deposits from its own account or
transfer the amounts to the issuer’s account on the next business day. In case
of no allocation for subscription orders, the underwriter must refund such
deposits to the subscribers within 14 days from the closing date of
subscription orders.
1.3 Document and Record Requirement
(Notification No. GorThor. 11/2549)
An
underwriter is required to maintain and keep current, as well as accurate,
books and records, including those in relation to clients’ trades, clients'
assets, as well as complaints received from clients, in an easily accessible
manner for a minimum period of 2 years. Notification No. GorThor. 42/2543
regarding record keeping shall apply mutatis mutandis to the underwriters.
Evidence concerning giving advice to
clients or receiving clients’ orders including tape records shall be maintained
for a minimum period of 1 month, or longer until the client complaints related
to such matters are completely resolved.
1.4Reporting Making
and Submission (Notification No. SorThor. 55/2546)
Securities companies must prepare and
submit the following reports to the SEC Office.
To be filed within 15 days after the end of
the quarter.
Semi-Annual Reports
Audited Financial Statement (ending June) (Form Bor.Lor. 1 and Bor.Lor. 1.1)
(SEC Circular SEC. Thor. 25/2547)
To be filed within 3 months after the end of
the period.
Annual
Reports
Annual Compliance Report (SEC
Circular SEC. Gor. 15/2538)
To be filed within 60 days of the following
year.
Audited Financial Statement
(ending December) (Form Bor.Lor. 1 and Bor.Lor. 1.1) (SEC Circular SEC. Thor.
25/2547)
To be filed within 21 days from the date of
the Board Meeting, or 4 months after year end, whichever is the sooner.
Other
Reports
Report on Gross Operating
Income for Annual Transaction Levy Calculation (Form 14-2) (Notification No.
SorThor/Nor/Yor. 59/2546)
To be filed by January 31 of the following
year, together with the 1st installment of the annual transaction levy.
Notifying Report of the Opening
of New Branch Offices (Form 92-2) (Notification No. SorThor. 39/2543)
To be filed before the branch office is in
operation.
Notifying Report of the Change
in Locations of Offices (Form 98(9)-1) (Notification AorThor. 12/2543)
To be filed before the new location is open
for operation.
1.5Risk Assessment
and Control (Notification No. TorThor. 63/2552)
An
underwriter should establish reasonable procedures as to risk measurement and
management to ensure continuity of its businesses.
Risk management programs should address
all aspects of risks associated with undertaking securities business.
2. Conduct Regulations
2.1General Code of
Conduct (Notifications No. TorThor. 63/2552 and GorThor. 11/2549)
The securities company shall comply with
regulations governing business conduct of securities brokerage and securities
dealing mutatis mutandis. In contacting, soliciting or giving advice to
clients, the securities company should be careful not to base their advice or
recommendations on internal or confidential information.
An
underwriter shall not underwrite options or warrants the underlying products of
which are issued or offered by their parent company or its subsidiaries unless
granted a waiver from the SEC upon the SEC Board’s approval;
An
underwriter shall prepare prospectus and subscription orders in accordance with
relevant regulations and the underwriting shall comply with the terms and
conditions as specified in the prospectus;
An
underwriter shall neither allocate its underwritten securities to the
prohibited persons as specified by the SEC nor shall they have any rights to
subscribe such securities unless granted an exemption for such allocations as
rights offering, ESOP or creditors apportionment according to restructuring
plans;
An
underwriter shall not distribute its research papers or purchase its
underwritten securities during prohibited periods unless granted a waiver by
the SEC;
An
underwriter shall cooperate with the issuer in providing reports of securities
allocation.
2.3 Other Conduct Rules
The securities company operating the
underwriting business shall have an effective compliance unit and independent
internal auditors. (Notification No. TorThor. 63/2552)
The securities company should have in place
systems to handle customer complaints. (Notification No. TorThor/Khor/Dor/Nor.
62/2552)
Annual Fees
Annual Fees (For those who had obtained
licenses before the Securities and Exchange Act B.E. 2535 became effective)
(Notification No. SorThor/Nor/Yor. 59/2546).)
To be paid annually at the rate of 1 percent of the total income (before
expenditures) from securities businesses but not below Bt500,000 or higher than
Bt5,000,000. The fee shall be paid in two installments:
(1)1stInstallment of Bt500,000 (at minimum)
to be paid by January of that calendar year, and (2)2ndInstallment of the remaining amount
(not exceeding Bt4,500,000) to be paid in full by January of the following
year.
This guide is merely highlights / introduction of
related provisions and regulations, and is not meant for reference. We,
therefore, would like to stress that those who intend to use this as reference
or guidance to comply must refer, instead, to the actual or complete versions
of the laws, notifications, rules, regulations, interpretations or
circulars.
Intermediaries Supervision and Development Department
Kornwara 0-2695-9554
Rangrong 0-2263-6050
Email : insec@sec.or.th
Last Updated
16 Jan 2013
Last Reviewed
16 Jan 2013
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Any person
operating securities business without a license shall be liable to imprisonment
for a term of 2 to 5 years, a fine from Bt200,000 to Bt500,000 and a daily
fine.