SEC held a seminar under the topic of “Thailand SEC Policy Dialogue 2018: Regulating by Market Forces” on 28 November 2018 at the Grand Hyatt Erawan Hotel, with the objective to stimulate policy discussions regarding the supervision and development of capital market from important stakeholders such as SET, institutional investors, the Government Pension Fund, listed companies, intermediaries, and professionals, with the hope for the market force to play a significant role in driving forward the capital market instead of just exclusively depend on regulations.

The seminar was graced with honorable speakers from both the domestic and international spheres, who exchanged opinions relating to the significance and benefits of market forces in the development of the capital market. The speakers also provided suggestions on how to shape the environment for market forces to work effectively, for instance, quality information and fair competition.

SEC Secretary-General Rapee Sucharitakul said “For the capital market to develop and sustainably prosper, it cannot exclusively depend on strict regulations, but it requires good governance and pressure from market participants, in addition to quality information and fair competition, all of which would encourage and support the capital market of Thailand to strengthen its market force, as well as sustainably develop the capital market of Thailand.

The best paper of the year was also presented at the seminar, a selected research paper from the contest “SEC Working Papers Forum 2018”. The contest was a partnership between SEC and leading institutions and organizations, with the objective to promote research and exchange of views on the capital market. The contest was open to the public, no regards to whether they are personnel in the capital market or academics. The selected paper was “Essays on Open-Ended Equity Mutual Funds in Thailand” by Asst. Prof. Dr. Kanis Saengchote and Dr. Roongkiat Ratanabanchuen, which explores into various interesting stylized facts of equity mutual funds in Thailand, including (1) when comparing between risks and returns, the equity funds with high management fees often yield less returns than the market, and that the results might not be worth the fees, (2) equity funds in Thailand do not have the characteristic of active management and yield similar returns to the general market, which leads to the fact that the unitholders might receive more benefits if they were to invest in the passive equity fund that yields similar returns to the market, and (3) equity funds in Thailand favor large-cap, growth, and high momentum stocks (stocks that would yield similar returns in the future as in the past), but the performance of the funds are not as high as the returns of the stock that the equity funds bought. This reflects that the equity funds might have the return-chasing behavior, and potentially suppressing returns for individual investors. More information can be found here http://bit.ly/2yu1I4U.

This paper highlighted the significance of information before deciding on any investment. Fees are also an important piece of information because they reflect the returns that the investors would receive, which the investors can compare this information in the factsheet of each fund. The investors can also consult investment advisors to help analyze the information. Moreover, other types of information are also important to study beforehand, such as investment policies, comparisons between performances of each fund, conditions of investment, and the securities holdings of each fund, so that the investors would become more confident that the investment would be in accordance with the objective and risks of the investors.

“SEC believes that everyone can play a role in the development of the capital market by helping drive forward the market force for long-term benefits of everyone.” Rapee added.

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