Sign In
SEC News
SEC issues rules to facilitate investors’ use of alternative tools to increase investment efficiency



Monday 22 April 2019 | No. 44 / 2019


Bangkok, 22 April 2019 – The SEC has issued rules allowing securities brokers and derivatives agents to provide trading services of capital market products more efficiently by giving investors access to portfolio advisory with execution and program trading services to create long-term wealth. The new rules will become effective from 16 May 2019 onwards.

Essentially, the new rules allow securities brokers and derivatives agents to provide two types of trading services of capital market products that respond to investors’ demands more efficiently, namely (1) program trading service that automates trading order execution according to clients’ selected investment strategy* and (2) portfolio advisory with execution service.** Both of the services are exempted from the securities business license in the category of private fund management and the derivatives business license in the category of derivatives fund management because they are incidental to the core business of trading services.  

SEC Assistant Secretary-General Paralee Sukonthaman said: “Nowadays, growing information on investment products in the capital market makes most investors unable to analyze and compare such information efficiently. Meanwhile securities brokers are concentrating more on portfolio advisory and offering more technology-driven services. Given this changing landscape, the SEC has proposed the new rules that will give investors more investing tools in the form of portfolio advisory with execution and program trading while helping intermediaries to improve and diversify their services more efficiently.”

In any case, to provide any of the two services above, intermediaries have to make an agreement with their clients regarding portfolio advisory with execution or program trading including the trading conditions. A key operating system compatible for the undertaking of private fund management must also be established to ensure that intermediaries will be able to deliver standardized services. Interested investors may seek more information on portfolio advisory with execution and program trading services from participating securities companies.

____________________

 

*   The execution of trading orders of capital market products based on an automated program that runs product selection and trading placement without interference from any factors and according to clients’ predetermined instructions as advised by securities brokers.

** The securities analysis and investment advisory to design a portfolio advisory that shows each type of capital market products and investment proportion. Trading orders will be executed according to the selected portfolio advisory and will be monitored and rebalanced to maintain its relevance to clients’ predetermined instructions.  












Building Confidence in the Capital Market
NEWS
Securities and Exchange Commission
Corporate Communication and Investor Service Department
Tel. (66)2033-9502-5 E-mail: press@sec.or.th
No. 44 / 2019 Monday 22 April 2019
SEC issues rules to facilitate investors’ use of alternative tools to increase investment efficiency
Bangkok, 22 April 2019 – The SEC has issued rules allowing securities brokers and derivatives agents to provide trading services of capital market products more efficiently by giving investors access to portfolio advisory with execution and program trading services to create long-term wealth. The new rules will become effective from 16 May 2019 onwards.

Essentially, the new rules allow securities brokers and derivatives agents to provide two types of trading services of capital market products that respond to investors’ demands more efficiently, namely (1) program trading service that automates trading order execution according to clients’ selected investment strategy* and (2) portfolio advisory with execution service.** Both of the services are exempted from the securities business license in the category of private fund management and the derivatives business license in the category of derivatives fund management because they are incidental to the core business of trading services.  

SEC Assistant Secretary-General Paralee Sukonthaman said: “Nowadays, growing information on investment products in the capital market makes most investors unable to analyze and compare such information efficiently. Meanwhile securities brokers are concentrating more on portfolio advisory and offering more technology-driven services. Given this changing landscape, the SEC has proposed the new rules that will give investors more investing tools in the form of portfolio advisory with execution and program trading while helping intermediaries to improve and diversify their services more efficiently.”

In any case, to provide any of the two services above, intermediaries have to make an agreement with their clients regarding portfolio advisory with execution or program trading including the trading conditions. A key operating system compatible for the undertaking of private fund management must also be established to ensure that intermediaries will be able to deliver standardized services. Interested investors may seek more information on portfolio advisory with execution and program trading services from participating securities companies.

____________________

 

*   The execution of trading orders of capital market products based on an automated program that runs product selection and trading placement without interference from any factors and according to clients’ predetermined instructions as advised by securities brokers.

** The securities analysis and investment advisory to design a portfolio advisory that shows each type of capital market products and investment proportion. Trading orders will be executed according to the selected portfolio advisory and will be monitored and rebalanced to maintain its relevance to clients’ predetermined instructions.