Thailand Post hopes to broaden its services by seeking approval from the securities regulator to sell mutual funds at post offices nationwide.
The post shop on the ground floor of the Grand Postal Building, the former headquarters of Thailand Post in Bang Rak district. The company is seeking permission to become a sales agent for mutual funds. SUNAN LORSOMSAB
The Securities and Exchange Commission (SEC) currently allows mutual funds to be sold by securities companies, asset management firms and banks. A sales agent must have a licence to be a fund's investment adviser.
To earn such a licence, an investment adviser must be qualified to give advice about mutual funds.
Thailand Post, which recently agreed to be a pay point for some mutual funds, is now interested in upgrading to become a sales agent, said SEC assistant secretary-general Duangmon Chuengsatiansup.
"In doing so, Thailand Post will require new investment at its branches, especially new systems to serve fund trading data and human resources able to give basic advice to investors," she said.
Thailand Post recently inked an agreement with One Asset Management, 7-Eleven's Counter Service and Tesco Lotus to provide pay points for mutual funds.
The service is available at 1,326 Thailand Post branches out of 3,500 across the country, as well as 8,553 7-Eleven stores and 1,770 Tesco Lotus locations.
"Thailand Post has the potential to be a significant sales channel for distributing funds for non-bank asset management firms," Mrs Duangmon said.
"It has countrywide facilities and wide coverage that will help funds access investors everywhere. Also, Thailand Post can be a pilot model for other retailers such as Tesco Lotus to jump on the bandwagon as a fund sales agent. This collaboration is absolutely win-win for all parties."
Mrs Duangmon said that while the SEC has given full support to asset management firms to expand their investor base, the regulator remains concerned about potential risks for retail investors.
The SEC has tried to spur mutual fund competition by requiring sellers to provide up-to-date information and keep clients informed of fund rankings.
The regulator will join with Morningstar and Asset Investment Management Co on performance rankings indicating maximum, minimum and average returns for mutual funds.
Fund performance rankings will be revised every month, starting by next Jan 1.
The proposed rules divide mutual funds into five classes: equity, fixed income, mixed, property and commodity, with the classes to be reviewed every 18 months.
For newly registered mutual funds, classification will be based on investment policies. Funds will be reclassified based on net exposure after disclosure of the first portfolio investment report.
"When investors go to a fund sales agent, they must receive this information before making a decision," Mrs Duangmon said.
Any sales agent that fails to comply with the rules will face a fine and public announcement.
The SEC will also crack down on funds that mislead investors by providing unclear information.