OBG talks to Vorapol Socatiyanurak, Secretary-General, Securities and Exchange Commission, Thailand (SEC)

Interview: Vorapol Socatiyanurak

What strategies does the SEC expect to implement in 2014 to allow for greater market accessibility for both local and foreign investors?

VORAPOL SOCATIYANURAK: The SEC has a strong determination to develop the Thai market to include all and to respond to all parties’ needs. Our market will have high level of immunity, based on good corporate governance practice; it will continue to be an important source of fundraising and investment for the private sector and investors. It will function as the main pillar for driving Thailand’s economy towards sustainable growth on par with its international counterparts. The strategic plan therefore comprises four key pillars: reaching out to all parties to allow for greater market accessibility for businesses; building a strong foundation for sustainable development; increasing the efficiency of the regulatory regime; and exploiting the benefits from the growth of emerging Asia. In addition to sharpening local competitiveness, the SEC plays an active role in international forums to promote market recognition and confidence, links between international markets and cross-border fundraising and investment.

How will the SEC nurture liquidity in the equity market and encourage domestic businesses to raise capital there rather than relying on bank financing?

VORAPOL: To enhance liquidity in the market and encourage local business to fundraise via the bourse, the SEC prioritises increasing new products and services, amending laws, rules and regulations that pose an obstacle to market growth and development, promoting financial literacy to the public and expanding opportunities for market accessibility. There need to be more products and services so that Thailand can become an attractive investment destination and the connector for foreign investment. We can achieve this through instruments such as infrastructure funds that will promote in-country and region-wide projects. It is time for all parties to make this goal a key element of the national agenda. Prompt action in developing infrastructure and logistics systems in Thailand to connect to neighbouring countries is vital. The SEC, therefore, approved the infrastructure fund as a financing tool to support economic expansion, long-term national competitiveness and financial innovation for more investment alternatives. The public and private sectors can participate in the development of the country’s infrastructure by investing in the fund, which will ease the government’s burdens on budget and public debts. The SEC has also offered opportunities for businesses nationwide – including small and medium-sized enterprises (SMEs) – to raise funds through the Thai capital market by initiating the “Pride of the Provinces” project. This initiative will encourage regional businesses to go public by providing them with advice and assistance in adding to their competitive edge. In addition, the SEC has also promoted venture capital and the SMEs Bond project as a financing mechanism to nurture newborn SMEs.

How will the Securities and Exchange Act (SEA) be amended to promote market development?

VORAPOL: The SEA was amended to enhance market efficiency as a whole. By adopting models from developed countries, such as the US, Australia and Hong Kong, the proposed amendment adds civil sanctions apart from criminal sanctions. In line with international standards, the SEC held public hearings and focus groups when writing the act to solicit comments from all parties, aiming to set forth legal reforms on provisions concerning misconduct in the market. Furthermore, this will allow more flexibility for foreign firms in obtaining approval to offer a sale of new securities as long as it complies with the SEA on information disclosure, corporate governance and takeovers, and if the law in the relevant jurisdiction has comparative investor protection as specified by the SEC. In addition, if a company commits offences under the foreign securities law, and adversely affects local investors and the Thai market, the alleged offender shall be subject to Thai legal proceedings and thus liable for penalty in Thailand.