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STOCK MARKET
NUNTAWUN POLKUAMDEE
The Stock Exchange of Thailand may be forced to cut its headcount by at least one-third as it prepares to transform itself into a public company over the next three years.
SET directors earlier this week announced plans to demutualise the organisation and list itself on the stock market by 2011, as recommended by the Boston Consulting Group (BCG). The BCG study notes that the SET must undergo considerable restructuring in preparation to become a fully for-profit public company.
Sources familiar with the study said it suggested reducing the headcount from more than 900 people now to around 565. The SET will not lay off staff, but instead look to transfer job functions deemed unnecessary after demutualisation to other units or to the new Capital Market Development Fund.
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The SET currently has eight subsidiaries: the Market for Alternative Investment, the Bond Electronic Exchange, Thailand Futures Exchange, Thailand Securities Depository, Thailand Clearing House Co Ltd, Settrade.com, Siam DR Co Ltd, and Family Know-how.
Family Know-how is almost certain to be the first transfer to the Capital Market Development Fund, as it functions to develop investment education programmes for the media.
BCG recommended that units such as Family Know-how either be transferred to the new development fund or sold off to investors. The development fund will be responsible for long-term policies and be financed from profits from the SET's own portfolio.
The exchange's organisational structure, meanwhile, is expected to be reshuffled within the next several months in preparation for demutualisation.
Four new positions are expected to be created to oversee core operations: a chief commercial officer overseeing trading systems and market development; a chief financial officer for legal and financial matters; a chief operating officer for back-office operations and IT systems; and a chief regulatory officer to manage market surveillance and disclosure procedures. All four positions will report to the chief executive officer.
The SET has already established an internal committee to vet candidates for the four positions. SET president Patareeya Benjapolchai will have her position changed to exchange CEO.
In terms of the shareholding structure of the newly listed SET, current plans call for the initial public offering to be split between brokers, the Capital Market Development Fund and public investors.
Brokers will receive their shares before the IPO process and can choose to sell their positions once share trading begins. A number of smaller securities firms are expected to divest their holdings to build up their cash resources ahead of the full liberalisation of the securities market in 2012.
Kobsak Pootrakul, the executive director of the SET Research Institute, said the SET planned to finalise its internal restructuring by 2009. Staff would begin to be rotated between departments under the new structure starting in October.
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