"It's a dilemma whether or not to set a minimum rate as fee. Because, if we do so, investors may think that asset management companies are in collusion.

"If the minimum fee measure is implemented, it can't be the same fee for all types of funds," said Maris, who added: "Each fund has a different cost. Also, each asset firm incurs different management costs for each fund. There will be plenty of details to work out. However, it's just an initial idea to sort out this fee war."

In April and July this year, the SEC granted Seamico Securities and Philip Securities mutual fund operator licenses. There are more firms on the waiting list, which plan to stake a claim for the mutual fund cake.

Currently, there are 18 asset management companies in operation with Siam City Asset Management and BT Asset management, as the latest entrants in 2004 and 2005, respectively.

Following the slump in the stock market and low interest rates on savings, the mutual fund business absorbed almost Bt300 billion from retail investors and depositors.

According to the association data, the net asset value of the entire industry, excluding the Resolving Financial Institution Problem Funds and Country Funds, rose to Bt771.15 billion at 2005 end, compared to Bt484.99 billion in 2004, and Bt438.34 billion in 2003.

The amount jumped to Bt898.96 billion early this month. Although many banks have hiked interest rates on fixed-deposit accounts in a bid to entice customers, the mutual-fund business has gradually emerged as a viable investment option for the common man and stock traders.

Due the poor market sentiment, more securities companies are expected to enter the mutual-fund business, as an alternative source of revenue to commissions on securities.

Piyarat Setthasiriphaiboon

The Nation