AFET seeks grace period on capital requirement

AFET seeks grace period on capital requirement

The Agricultural Futures Exchange of Thailand (AFET) has asked the market regulator for a two-year grace period to raise the capital required to be a brokerage member of the Thailand Futures Exchange (TFEX).

AFET asked the Securities and Exchange Commission yesterday during a discussion about the merger between the two futures exchanges. At the end of last year the government demanded the two exchanges be merged by July this year.

AFET offers only agricultural trading while TFEX provides other types of futures trading.

Pasit Charoensri, the chairman of the Association of Agricultural Futures Trading Companies, said the problem was that all 10 members of AFET had capital of only 25-50 million baht, far lower than the minimum requirement of 100 million baht to be a member of TFEX. 

The brokers are asking for a SEC rule allowing them to trade on the TFEX board immediately with the lower capital.

"We asked for two years to gradually increase our capital to 100 million baht, as it is quite difficult to double our capital in such a short period," said Mr Pasit.

He said most AFET brokers were not profitable because of the lack of liquidity on the exchange, which has average trading of 200-300 contracts per year.

"We also questioned our restricted membership trading only in agriculture during the grace period," said Mr Pasit.

"If the SEC allows us to raise capital at the same time we can trade all types of products on the TFEX, meaning we will have a higher trading volume and better ability to increase capital sooner."

Mr Pasit, also president and chief executive of DS Futures, said AFET members fully supported the merger because the main reason for the bourse's lack of liquidity is government intervention in agricultural product prices, discouraging investors.

"We hope TFEX can offer more variety, is more efficient and enables a high trading volume," he said.

In a related development, an industry source said the current president of AFET, Wiwat Teerawanichpong, submitted an application for a new job in upper management of the Public Warehouse Organisation (PWO) last week.

Mr Wiwat joined AFET in last October.



Do you like the content of this article?
COMMENT
TRENDING

11 convicted of 2002 gang-rape in India go free

AHMEDABAD: Eleven Hindu men jailed for life for the gang-rape of a pregnant Muslim woman during Hindu-Muslim riots in 2002 have been freed on remission, officials said on Tuesday, drawing condemnation from the victim's husband, lawyers and politicians.

16 Aug 2022

Govt readies B150bn loan guarantee for oil fund

The cabinet on Tuesday approved a law to guarantee up to 150 billion baht (US$4.23 billion) in loans for the state oil fund to support energy prices as the government fights inflation, according to a government source and media reports.

16 Aug 2022

Two teachers jump off bridge, leave farewell letters behind in Trat

TRAT: Two women - a teacher and a retired teacher - jumped off a bridge into a canal in Muang district of this eastern province on Tuesday morning, with two farewell letters written to their children found inside a car they travelled in.

16 Aug 2022