SEC vows to restore trust in capital market after year of scandals
Thailand’s Securities and Exchange Commission (SEC) has vowed to work to restore trust and confidence in the country's capital market by implementing more modern and reasonable regulations, employing innovative technologies, and working closely with all stakeholders.
The remarks were made during a panel discussion titled “Co-creating and Developing the Capital Market to Drive the Country Towards Sustainable Growth”.
Thursday’s discussion formed part of the announcement of the commission’s 2024 strategic roadmap, which aims to elevate its role in supervising and improving Thailand's capital market so that everyone has equal access.
SEC Secretary-General Pornanong Budsaratragoon said that creating a capital market for all is a mission to which the SEC is committed, adding that despite the difficulties, the SEC must continue to pursue its objectives.
Given the current global economic slowdown and the country’s weak growth, she believed that the capital market should play a larger role in assisting businesses and providing a means for Thais to save.
Therefore, the SEC must take action to facilitate all parties, both domestic and international, in raising funds, investing and saving.
These reforms include modernising laws and regulations, developing an SEC system with appropriate advanced technology, increasing SEC capacity, enforcing the law firmly, providing an ecosystem for digital assets, reducing any difficulties, and supporting green and social enterprises.
Pornanong said she was confident that by implementing all of these strategies, Thailand’s capital market would regain trust and confidence. This will make the country's market more appealing to international investors, founders, entrepreneurs, and startups.
Meanwhile, as the capital market expands, there will be a wider range of products from which to choose.
SEC’s movement came as the country's capital market this year experienced a crisis of faith and confidence after several frauds and cases of misconduct.
The most scandalous was that of Stark Corporation, an industrial cable manufacturer, in July. A special investigation uncovered a staggering 15.6 billion baht in irregular transactions across its divisions. The transactions were discovered after the firm was rocked by an accounting scandal and subsequent debt defaults.
Chairman of the Federation of Thai Capital Market Organisations (FETCO), Kobsak Pootrakool, agreed with the SEC Secretary-General that the country's capital market must prioritise two changes: to rebuild trust and to modernise.
He expressed his strong support in assisting the SEC to implement all the planned measures, including establishing special teams to analyse, monitor, and check the market’s small cap stocks.
"We are in the process of establishing this analyst team who will prepare a report on all small cap stocks listed on Thailand's stock exchanges. The move will provide investors with the necessary information to make an informed decision while also alerting those companies to play by the rules," he said.
In general, completing a single report for a single listed company takes time and resources. As a result, most major consulting firms in Thailand focus on large corporations because their reports can be sold and a profit made.
Kobsak explained that since no one is monitoring these smaller companies, this gap allows them to do anything, including violating the law or defrauding investors.
"Thailand's capital market now has so many dark spots. Having this analyst team will help illuminate these areas so they becomc clear,” he said, adding that he is submitting the project to the Capital Market Development Fund (CMDF) for funding of around 20 million baht.
Pakorn Peetathawatchai, president of the Stock Exchange of Thailand (SET), also expressed his readiness to work with the SEC to improve the country's capital market.
He pointed out that SET has already collaborated with SEC to improve Thai financial literacy. Still, there are numerous possibilities for all parties to collaborate as a single team.
"We may have some overlap but this is needed to seamlessly improve the capital market in a sustainable way," he said.
Their words came as Prime Minister Srettha Thavisin unveiled three key initiatives aimed at revitalising Thailand’s ailing capital market.
The three policies designed to boost foreign investment are finalising free trade agreements, shifting the emphasis to sustainability, and encouraging private sector fund-raising.
Srettha also emphasised the importance of the capital market in Thailand’s transition to a digital economy.
