Bangkok, October 16, 2015 ? The SEC will pay a closer attention to investors? behaviors and factors influencing their decision making as more studies show rationality is not the only criterion for making an investment in a mutual fund.

The SEC studies on behavioral finance have revealed that investors tend to take many other factors into consideration as well when making a decision to invest in a mutual fund. Such factors include emotion, personal belief and attitudes toward different channels of savings and investment. For example, some investors prefer low risk, principal guaranteed investment while others are more familiar with traditional savings deposit. Some prefer short term, fixed return products while others are drawn to giveaways and complimentary gifts or neglect details of the products altogether.

Such behavioral information poses a big question for the SEC as to how best to supervise and develop the overall mutual fund business to ensure that products and services would truly respond to investors? demands and enhance investors? protection. 

SEC Assistant Secretary-General Duangmon Chuengsatiansup said: "investment consultants are required to have their clients take a suitability test to make sure that the clients understand their own risk profile and receive appropriate investment advice before making an investment or a transaction. Clear and comprehensive disclosure of information, fund performance comparison in the same categories, and convenient access to services through innovative technological channels are additional criteria to comply."

Currently, many types of mutual funds are designed in direct response to investors? behaviors such as unit link insurance and trigger fund, which is preset to dissolve upon reaching the target return within a pre-scheduled timeframe.

Trigger funds have recently become popular. The 2013 ? August 2015 statistics show that among the 135 domestic trigger funds, 48 (or approximately 36 percent) reached the target return within one year, while those established in 2015 have not yet achieved the expected returns. Meanwhile, of the 132 foreign trigger funds, 53 (or approximately 40 percent) have reached the target goal within one year. In addition, trigger fund fees are higher than those of general funds and the total expense ratio (TER) is in the range of 1.12 ? 4.5 percent or a 2.8 percent average compared to 1.8 percent in general equity funds. 

"Such aforesaid research results have raised possible issues of unclear information disclosure, misleading advertising messages and fee collection. The SEC therefore reinforces such matters on asset management firms, and revises regulations governing advertisement of financial products to prevent improper distraction or solicitation that may cause investors to misunderstand the true objective of
investment in the chosen product," she added.  

Concurrently, the SEC is amending other relevant regulations to be in line with changing market environments and technological advancements to ensure appropriate and reliable supervision and investor protection.

In any case, investors are advised to study details and conditions of target products thoroughly before making investment decisions. For inquiries or further information, please call SEC Hotline at 1207.