SEC Announces the Four-Year Results in Promoting Good Corporate Governance, Reducing Systemic Risk, Developing Mechanism to Empower Investor and Expanding Investment Alternative through Mutual Fund for the Long Term Capital Market’s Stability
Mr. Prasarn Trairatvorakul, Secretary-General, the Office of the Securities and Exchange Commission, stated the results in his four-year term as the Secretary-General that “The mission in supervising and developing capital market is the on-going process to meet the main objectives of international standards which are (1) ensuring that market is fair, efficient and transparent, (2) reducing systemic risk, and (3) protecting investors against possible improper conduct. In this essence, drawback in the capital market should be solved, while innovation responding to the changing environment should be created for the benefit of all market participants.”
“The past four years was the turn of economic recovery. Private sector still confronted with fundamental soundness, and was in need of fund raising for financial restructuring. The SEC has played the supporting role in promoting capital market for solving private sector’s difficulty. In addition, the lesson learnt from the crisis emphasized the need to develop capital market structure so as to serve the role as a direct fund raising source, that sustains the economic growth as well as enhances the country’s competitiveness.”
“The 2000-2003 major results of the SEC were : restored confidence in the capital market, preserved integrity of the entire system, developed mechanism to empower investors and increased variety of products as well as investment alternative to investors. Above all, the concrete results that bore the fruit were as follows :
· Promoting good corporate governance in the capital market, including issuance of disciplinary and incentive measures in accordance with statutory power, and encouraging market participants to practice good corporate governance. The SEC has participated in encouraging public and private sector to be aware of the importance and benefit of good corporate governance, and at present good corporate governance has received high recognition and practice.
· Reducing systemic risk that may occur in the securities trading system is the key task to accomplish in order to preserve market integrity. The works involve supervision of securities company’s financial soundness, accountability of clearing and settlement system by having measures to cushion against damage from default, appropriateness of securities trading system, and adequacy of measure to detect or prevent irregular or inappropriate securities trading thereby reducing systemic risk.
· Requiring market participants to disclose information in line with standard practice, and proposing revision to law and regulation to empower shareholder right. The measures enable investors to the access of basic information necessary for making investment decision for greater self-protection.
· Providing investment alternative to increase investor participation by promoting various types of mutual funds that meet the need and risk accepted level of each investor. These are guaranteed fund, capital protected fund (similar to saving deposit), and foreign investment fund. In addition, enhancing investors’ knowledge and providing tool for facilitating investment decision making, along with increasing number of mutual fund management company to give more choice of service are encouraged. In this essence, investment through mutual fund will not only give more investment alternative, but it will also expand investor base and increase number of institutional investors which will lead to good corporate governance across listed companies and innovation of financial instrument.
“The success and advance of capital market today derives from the cooperation and support of all participants, namely the government, business sector, relevant authority and investors. Their collaboration contributes to the success in the capital market development. Even though, the capital market has developed in the right direction, the drive to fortify capital market as the funding source for developing the country economy in the long run and as an attractive investment is essential. Market participants must therefore strongly and continually support the investor base expansion in terms of quantity and quality for a balance structure of investors, promoting intermediary to enhance its service quality and expand scope of its business operation, developing infrastructure to facilitate fund mobilization, as well as enhancing liquidity and managing risk. In addition, ensuring integrity of capital market through promoting good corporate governance, together with strict law enforcement against wrong doing will also need to be accomplished.”
“In my term as Secretary-General which ends on December 27, 2003, I would like to convey my thankfulness to all participants who give me trust and collaboration. I would also like to convey my support to the new Secretary-General who will lead the capital market and the SEC into the age of sustainable growth in line with economy where the capital market will increasingly become more important and require further development and supervision.”, concluded Mr. Trairatvorakul.