The Stock Exchange of Thailand (SET) board resolved on May 15 to appoint Kitipong Urapeepattanapong as the 19th chairman of the bourse.
Mr Kitipong said that attracting high-quality companies to list on the stock exchange is crucial.
His appointment comes amid a crisis of investor confidence in the Thai capital market, posing a significant challenge to the new chairman, a veteran legal expert.
The Bangkok Post conducted an exclusive interview with Mr Kitipong regarding his policies for overseeing the stock exchange and efforts to restore investor confidence and trust.
"I assume this post at a time when confidence in the Thai capital market is at a low. The SET index has dropped from a peak of more than 1,800 points to barely above 1,300 points," he said.
"Several cases, particularly those involving More Return and Stark securities, have severely shaken investor confidence, resulting in significant losses for many people. This situation affects both the stock exchange's credibility and the overall economy. Therefore, my urgent mission is to restore confidence in the Thai capital market."
Mr Kitipong outlined four policies to revive trust in the Thai stock market.
First is swift and effective law enforcement. He said investor confidence has been undermined by various factors, such as the quality of listed products and the effectiveness of regulatory measures to prevent fraud, stock manipulation and account misrepresentation. The economic fallout from the Covid crisis also led to fewer high-quality companies listing on the exchange.
In addition, initial public offerings have become targets for stock manipulation, causing significant losses for small investors and eroding trust, said Mr Kitipong. Enforcing laws more swiftly and effectively is crucial for rebuilding confidence.
He said some stock manipulation cases take 3-5 years to resolve, and such delays undermine the fear of law enforcement.
While the SET can quickly detect irregular trading activities, the authority to investigate and take legal action lies with the Securities and Exchange Commission (SEC) and other relevant agencies.
"Coordination among these bodies needs to be improved. With the appointment of a new SEC secretary-general, we will discuss ways to enhance cooperation," said Mr Kitipong.
"In future fraud cases, there is a proposal to issue specific emergency decrees to handle these situations efficiently. This will require further legal discussions."
His second strategy calls for ensuring fairness for both large and small investors. Addressing this imbalance is essential for fairness in trading, said Mr Kitipong.
The use of technology in trading needs to be regulated, such as naked short selling, automated trading and high-frequency trading, he said.
The SET has been gradually implementing measures to tackle these issues, but the process needs to be expedited. For example, the stakeholder hearing process should not take too long, said Mr Kitipong.
The bourse also plans to utilise artificial intelligence to scrutinise the financial statements of listed companies. If there are suspicious discrepancies, such as unexpected profits in sectors where peers are suffering losses, the system will alert investors, acting as a red flag.
This information can help investors make informed decisions, and auditors will be called in for further investigation, he said.
Another tactic is developing new financial products for the stock market, such as those related to carbon credits and environmental, social and governance. Mr Kitipong said he also wants to introduce products that support social and community initiatives, such as education funds, retirement savings funds and funds for the elderly, which should include tax incentives to encourage investment.
Attracting high-quality firms to list on the stock exchange is crucial, as many good companies are reluctant to list because owners fear losing control, he said.
"We need to devise special measures that allow these companies to list without founders losing control, benefiting both the companies and investors," said Mr Kitipong.
Lastly, as a veteran legal expert and long-time SET director, he values legal education and financial literacy. Mr Kitipong recognises that legal proceedings related to securities and the stock market often require substantial interpretation by law enforcement, as there is no standardised textbook for such cases.
"I want to develop a legal textbook on securities laws for the justice segment to reduce the need for legal interpretation and discretion," he said.
Mr Kitipong was a member of the SET board for more than a year before becoming chairman, leaving 15 months on his three-year term.
"I am committed to making the most of this time to enhance the SET and the Thai capital market. I have no special agenda in this role, no political motivations or favouritism for these final 15 months," he said.