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Baht/$ 33.49/53
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14,000
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Way being paved for market liberalisation
NUNTAWUN POLKUAMDEE
Regulators will charge only 20 million baht for a new securities business licence and five million each for mutual fund and private licences starting in 2012, according to the Securities and Exchange Commission. The new licensing framework comes as regulators prepare for the full liberalisation of the securities sector over the next several years.
The fees represent a sharp discount from the past, when licence fees for underwriting and brokerage cost 100 million baht each and dealing and advisory licenses 50 million each. While it once cost 300 million baht in fees alone to have the full complement of licences, in four years the regulatory costs will drop to just 20 million.
Trakarn Nopmuang, director of the SEC licencing department, said from 2012, licences will be split into three categories: full licences, boutique licences and single licences.
Full licences will cover four types of securities businesses: brokerage, underwriting, dealing and investment advisory services.
Licences are open to banks, securities firms, insurance companies and other financial institutions. Minimum capital for any new company is 500 million baht, and applicants must pass minimum qualifications in terms of management teams.
Of the 41 securities firms in operation now, only four lack licences for all four types of securities business. KTB Securities lacks an investment advisory licence, Kasikorn Securities lacks underwriting and advisory licences, Merrill Lynch Securities lacks a dealing licence and Adkinson lacks an underwriting licence.
Mr Trakarn said the four companies would be allowed to apply for their missing licences at no cost.
Mr Trakarn said regulators would also offer boutique service licences at five million baht, offering either debt or asset management services.
The debt service licence will cover debt underwriting, dealing, selling agent, advisory and securities borrowing and lending. For asset management, eight segments are available: asset management, private asset management, selling agent, trading, fund brokering, unit trust underwriting, investment advisory and venture capital fund.
A boutique service business requires reserve capital of 100 million baht, and management executives must meet professional qualification standards.
Single licences, priced at 30,000 baht, cover four business categories: limited broker dealer underwriter, investment advisor, securities borrowing and lending and venture capital fund.
Mr Trakarn said the SEC would offer licence packages, covering full securities services for 20 million baht and boutique services for 10 million for institutions such as commercial banks.
While banks are regulated by the Bank of Thailand, financial institutions must still apply with the SEC if they want to enter the securities business.
Licences would be approved within 180 days after an application is filed, Mr Trakarn said.
The SEC will not approve new securities licences until full liberalisation in 2012. Applications for asset management licences and other licences however will be considered.
Mr Trakarn said while the value of a licence would drop considerably over the next several years as new licence fees fall, existing brokers still have considerable value in the form of their brokerage seats on the Stock Exchange of Thailand.
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