The SEC supervises intermediaries? efficiency with an emphasis on risk management, suitable business model and risk profile of each securities house.?

SEC Assistant Secretary-General Paralee Sukonthaman said: ?The SEC supervision takes into serious account intermediaries? managerial structure and work systems to ensure protection of clients? best interest and the overall market reliability. Some of the key issues include competent personnel, professional code of conduct, effective risk management and sound financial condition.?

?Take client acceptance process, for example. It must cover the know-your-client and due diligence, custody of clients? assets and transaction verification to ensure that client services are efficient and to prevent exploitation of securities firms for improper gains,? she added.?

In any case, the SEC rulemaking on intermediaries? work systems emphasizes more on principles based approach and minimum requirements to better respond to business models and risk profiles of different intermediaries amid the fast changing industry and technological environments.

Some of the first focuses of the principles-based supervision include company policy, compliance system, risk management system suitable for business types and risk profiles. However, a stricter work system than legally required is welcome as well.?

As a frontline compliance supervisor, intermediaries are also required to set up an efficient complaint handling system in support of daily operation. Concurrently, the SEC employs a risk based approach to scheduled and/or random inspection as well as case-by-case examination on suspicious facts.

Overall, the number of complaints against unlicensed securities or derivatives businesses is on a gradual decline, and 75 percent of the cases is beyond the SEC?s authority, for example, illegitimate solicitation of currency exchange, agricultural products and gold spot, many of which are frauds or Ponzi schemes. All of such cases have thus been forwarded to relevant authorities.

Investors are strongly advised to consult the SEC list of licensed and registered intermediaries under the License Check and Investor Alerts banners at www.sec.or.th. Whistleblowers may report clues or information on suspicious acts or unlicensed business operation for the SEC?s further examination via Hotline 1207.