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SECURITIES
NUNTAWUN POLKUAMDEE
The Securities and Exchange Commission plans to offer new licences for companies to offer securities depository, clearing and registrar services to create competition for the Thailand Securities Depository, the country's central clearing house.
Sources said the deregulation would take part together with plans to demutualise the Stock Exchange of Thailand, the parent of the TSD.
Regulators say once the SET transforms into a for-profit, private company, competition should be allowed in the securities depository segment to give investors and market participants greater options and help push prices down.
The SEC plans to push for the TSD to be separated from the umbrella of the SET to come under its direct supervision, a model used by several other countries under the world.
Many leading commercial banks and financial institutions offer depository and clearing services under approval from their country's securities regulator, said one source. Deregulation would not necessarily stop with the clearing and settlement process, he added.
"In the future, the SEC may allow new exchanges to emerge, similar to that in Western countries where different securities markets compete for investors and listed companies," the source said.
The TSD currently is revising its own operations and procedures to comply with new rules under the amended SEC Act that took effect on March 5.
Under the amended law, the TSD now falls under the supervision of the SEC's Capital Markets Supervisory Board, a new body whose directors are now in the process of being selected. The law also requires clearing houses such as the TSD to separate customer assets from that of the company and its members to minimise potential risk.
The TSD is one of the main sources of revenues for the SET, with earnings of around 800 million baht last year or 40% of total revenues. Revenues for the TSD comes from its services as a securities registrar, a scripless depository of equities and debt instruments and its role in processing clearing, settlement and delivery for securities on the SET, the Thailand Futures Exchange and over-the-counter market.
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