3. SEC’s role for the capital market development
As mentioned earlier, the focal point of SEC’s role should be based on the IOSCO principles of protecting investors, ensuring that markets are fair, efficient and transparent, reducing systemic risk, and investor education. In addition, it is also important to deal with underlying impediments and strengthen the competetiveness of Thai capital market.Therefore, the SEC will focus its attention on four following aspects;
(1) Maintaining market integrity and investor protection
The important task of maintaining market integrity and protecting investors include the quality control of market players that will result in transparency and proper disclosure of information through overseeing corporate governance of issuing companies, and the service quality provided by financial advisors and auditors. SEC also supervises the market and intermediaries for fair trading activities, inspects disclosure of issuing companies, and ensures an effective enforcement system. Apart from ensuring that these rules and regulations are on par with international standards, SEC will also build a mechanism of self and market disciplines to complement the regulatory discipline.
(2) Ensuring Stability of Financial system
In terms of market resiliency, it is crucial to ensure that the financial system could withstand the market volatility and that the turbulences, if arise, could be resolved and contained . In line with this, SEC has strengthened efficiency in monitoring financial position, business operation, and risk factors of market participants including clearing house and stock exchange, with the purpose to identify key risk indicators and mitigate them effectively.
(3) Promoting competitiveness in Thai capital market
In order to widen the range of product diversity and fundraising tools, SEC has adopted new regulations regarding the infrastructure fund, and the Real Estate Investment Trust (REIT). SEC has also revised regulations to facilitate public offerings of newly issued shares of a holding company. In the next phase, the SEC will implement more relaxed and flexible regulations for securities issuance to promote innovation of products and services with degree and speed that would allow for proper risk management to the system.
Regarding the international scope, SEC will play more proactive role to enhance Thai capital market’s capacity to capture benefit from emerging Asia growth, particularly from Greater Mekong Subregion (GMS). Recently, major economies, both in and outside the region, are paying attention to GMS and considered it as one of strategic locations for their economic development policies. Thailand, as a member of the GMS, has great advantages in terms of location, cultural proximity and well-developed infrastructures in real sector and financial system that can enhance mutual benefit to Thailand and neighboring countries. Hence, the GMS should be concretely included in Thailand’s capital market development strategies so that Thailand can become a significant connector between developing countries in Asia especially the GMS members and the rest of the world so that we would benefit from the growth of the region as well as from the world’s capital market development.
(4) Promoting Access to capital market
For the purpose of promoting accessible capital market, it is important for SEC to reach out to all stakeholders so that Thailand capital market will be fully utilized in enhancing their growth. In terms of issuers, the SEC has already initiated projects to facilitate fundraising for all types of businesses; namely, “Pride of Province” and “SMEs Bond” aiming at businesses in countryside and SMEs. SMEs have been the backbone of Thai economy, and they need access to capital to expand their business to get ready for regional and international linkages. So in the next phase, SEC will aim to develop more fundraising channels for SMEs and other targeted groups of entrepreneurs. In doing this, SEC will emphasize on providing knowledge and guidelines on preparation for successful fundraising and initiating activities to foster networks among SMEs, financial advisors and potential investors.
With regards to the general public, the SEC has highlighted the essence of financial literacy and, in the past year, has proceeded on promoting comprehensive investor education materials through various channels, and developing “start-to-invest” mobile application. Currently, despite the increasing number of Thai investors in Thai capital market, there still lacks suitable investment advisory services which results in high concentration of investment in deposit-like products. This would impede the investors’ risk diversification and reduce the chance of getting higher return. As a result, SEC will significantly promote asset allocation concept and investment products that serve investors’ investment goal and risk appetite while sustaining their long-term savings. To implement this, SEC will carry out various measures regarding widening the distribution channels of securities firms (both standalone and bank affiliates), improving quality of financial advisors, promoting investor education, and facilitating the creation of products that are suitable for new investors.
• SEC Strategic plan 2015