Bangkok, 23 August 2019– SEC is seeking public comments on draft guidelines on operations of securities companies and derivatives intermediaries offering Portfolio Advisory or Program Trading services, which was prepared by the Association of Securities Companies to set the standard conduct of business and improve capital product trading service.
SEC has issued the rules permitting the derivatives business operators or
derivatives agent to carry out capital market product trading service in
accordance with the Portfolio Advisory and Program Trading plans without being
regarded as carrying out the securities business of private fund management or
derivatives fund management, respectively. These rules have been in effect from
16 May 2019, with the objectives to ensure that assistance on portfolio
advisory and program trading is made available for investors, while the
business operators may enhance the effectiveness of the service provision.
To improve the service provision standards, the Association of Securities
Companies has drawn up the draft operating guidelines to be observed by its
members. Upon the approval of SEC, securities companies and derivatives
intermediaries of all kinds, such as, commercial banks, life insurance company,
and mutual fund brokerage securities companies (BSC) providing such services
shall comply with the draft guidelines of the Association that has been
approved by SEC*. The guidelines contains details on :1) preparation
of the service model responsible by a high-ranking executive officer; 2)
preparation of the service agreement in respect of, for example, scope
of conditions of service provision, customer’s rights, source of investment
strategy; 3) availability of the appropriate personnel to provide investment
advisory services; 4) process and operations of the business operator,
such as, reporting of investment results, adjustment process, investment
strategy by presenting information for a customer’s decision-making and
providing appropriate information; and 5) charge of service fees, which,
regardless of how they are determined, must be informed to the customer prior
to the service provision.
However, the draft guidelines will be effective and applicable to the
aforementioned business operators only if approval from SEC has been obtained.
SEC is, therefore, seeking comments from the business sector and the general
public prior to consideration of approval. The
consultation paper is available at www.sec.or.th/hearing . Stakeholders and
interested parties are welcome to submit comments and recommendations via the
website, or email: chanisarab@sec.or.th or rangrong@sec.or.th. The public
hearing ends on 23 September 2019.
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Note:*
By virtue of Article 9 of the Notification of the Capital Market Supervisory
Board No. TorThor. 35/2556 re: Standard Conduct of Business, Management
Arrangement, Operating Systems and Providing Services to Clients of Securities
Companies and Derivatives Intermediaries, dated 6 September 2013