Local money changers have set up the Thai Association of Foreign Exchange (Tafex) to upgrade small foreign exchange businesses to international standards.
Tafex chairman Chanaporn Poonsuphirun said the move is in preparation for changing global money markets and Thailand's financial liberalisation in the near future as well as the Asean Economic Community in 2016.
Tafex, which was established three weeks ago, will initially have up to 40 members out of the 1,217 operators in the business.
Worldwide, the value of foreign exchange through banks and money changers is US$1.1 quadrillion, mainly from banks.
Growth in value of between 0.1% and 0.5% is expected this year and 1-2% next year.
Ms Chanaporn said Tafex will focus mainly on education and business quality in its 2013-14 plan.
It will serve as an information centre regarding regulations and laws.
Tafex will also organise Quality Money Exchanger training courses and other programmes to improve business quality overall.
Such methods will help to build up clients' confidence and protect the members from illegal transactions as well, said Ms Chanaporn.
"The industry suffered a serious blow when Thailand was put on the dark-grey list by the intergovernmental Financial Action Task Force. Establishing Tafex to improve business quality and good governance is the first step towards meeting international standards," said Ms Chanaporn.
Apichai Susamakulvong, the president and founder of Super Rich (Thailand) Co, the country's largest money changer and a Tafex member, said the Bank of Thailand has provided business licences for this activity for several years.
Previously, people looked down on small companies' money exchange business as a "black market", he said.
But since the industry started being licensed, public confidence in the activity has risen.
"We should create standards for the business and treat customers fairly. Tafex has been talking about a fair exchange rate by setting a ceiling on the spread. Improving knowledge is another key factor," said Mr Apichai.
Pol Col Sihanart Prayoonrat, acting secretary-general of the Anti-Money Laundering Office (Amlo), said many money changers do not have a good understanding of foreign exchange law.
Tafex will educate them about legal business operations, he said.
Business law stipulates operators must report any foreign exchange amount above 2 million baht to Amlo.
About the author
- Writer: Somruedi Banchongduang
Position: Business Reporter