Bangkok, 13 September 2016 - The SEC has imposed a two-year suspension of approval on {A}, Executive Chairman of {X1} Company Limited, for failing to supervise the Know Your Client/Client Due Diligence (KYC/CDD) as well as client activity oversight systems. Additionally, the SEC is in the process of submitting the? case for consideration of the Criminal Fining Committee.

During a routine inspection of {X1} Company Limited, the SEC found deficiencies in the company's KYC/CDD system. Also its client activity oversight was insufficient to effectively verify the identity of clients or their benefactors, and thus weakened the prevention of improper client activities. Under such circumstance, if a client committed any wrongdoing, the company could be deemed to have supported or participated in such act.?

As the Executive Chairman of Apple Wealth Securities, {A} was involved in the company's misconduct and failed to perform supervisory duties. He approved the opening of trading accounts and the increase of trading credit lines of several clients who submitted incomplete financial documents, or whose financial condition was materially inconsistent with their financial transactions, or whose information was insufficient for identification or verification.

In addition, as the head of the company's Anti-Money Laundering Committee, he failed to take action when certain clients ordered transactions significantly inconsistent with their financial condition. In some other cases, he failed to instruct an in-depth examination of the clients? transactions as should have normally been done in other normal cases.? These kinds of incidents took place repeatedly, but the company which was under his direct supervision did not conduct proper examination.?

In 2014, the SEC found a similar misconduct and took legal action against {X1} Company Limited and strictly instructed the company to improve its compliance with the oversight regulations.

The company's offense was liable to violation of Section 113 of the Securities and Exchange Act B.E. 2535 (1992) (SEA)*, while {A}, the most senior executive who was responsible for the company's business operation, was involved in those misconducts and failed to perform supervisory duties. His acts were therefore in violation of Section 283 of the SEA. The SEC will forward the case to the Criminal Fining Committee to consider fine penalties, and if {A} refuses to enter the fining process, the SEC will file a criminal complaint for further legal proceedings.

Due to his misconduct, {A} is deemed to have prohibited characteristics of capital market personnel as specified in the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 8/2557 Re: Rules on Capital Market Personnel dated 3 June 2014. The SEC therefore has suspended him from functioning as capital market personnel for two years, starting from 14 September 2016. During the suspension period, {A} is not allowed to work in the managerial or advisory areas in the company, nor could he perform any other duties as the capital market personnel**.

The SEC has been communicating with all securities companies and their compliance units as well as the Association of Securities Companies (ASCO) to emphasize the importance and proper implementation of the KYC/CDD assessment as it is one of the core functions of every securities company's business operations.?

SEC Deputy Secretary-General Tipsuda Thavaramara said: "The SEC expects executives of securities companies to strictly supervise compliance with good corporate governance principles. A reliable KYC/CDD system can reduce the possibility of inappropriate activities that may impose risks to the clients or the securities companies, and could consequently affect the overall market confidence."

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*{X1} Company Limited misconduct was in violation of Section 113 and liable to the penalties under Section 282 of the SEA. The Criminal Fining Committee imposed a fine of 2.27 million baht on 31 August 2016.?

**The prohibited characteristics of capital market personnel under Clause 33(2)(3), 35(2) and 30(5) and Clause 31(4) of the Notification of the Capital Market Supervisory Board No. Tor Lor Thor. 8/2557 Re: Rules on Capital Market Personnel dated 3 June 2014.