It thus became another state agency to undergo major change following the September 19 coup. The SEC's new structure is expected to be implemented next year, following amendment of the Securities and Exchange Act.

The securities watchdog has been the target of strong criticism over the 14 years since it was formed, because of alleged political control. The finance minister has always been its chairman. The Bank of Thailand governor and the permanent secretaries for finance and commerce are key members, while its other directors - all of them appointed by the finance minister - come from the fields of law, finance and accounting.

The criticism reached a peak this year after the family of ousted Prime Minister Thaksin Shinawatra sold a controlling stake in Shin Corp to Temasek Holdings of Singapore in Thailand's largest-ever acquisition deal.

The securities watchdog faced a barrage of questions about its decision to grant the buyers the right to launch a tender offer for Advanced Info Service (AIS) shares at Bt72.31 apiece - a 30-per-cent discount - one day ahead of the deal. At the same time, it waived the need for tender offers for stock of iTV and Shin Satellite (ShinSat), explaining that the buyers had no intention of holding a significant stake in either firm. Shin owns 41.8 per cent of AIS, 41.34 per cent of ShinSat and 52.93 per cent of iTV.

The SEC also faced complaints of dragging its feet in launching an investigation into Ample Rich Investments, reportedly set up by Thaksin to hold 329 million shares of Shin belonging to his children Panthongtae and Pinthongta.

The securities watchdog later fined Panthongtae Bt5.98 million for failing to report a change in his shareholding in Shin and launch a mandatory tender offer when his shareholding exceeded 25 per cent. The fine was much lower than many expected.

Under the reform plan, the secretary-general and all of the board members, including the chairman, will be nominated by a search committee rather than appointed by the finance minister and approved by the Cabinet.

The of SEC board members' terms in office will be three years, renewable up to three times. The SEC secretary-general's term may be extended from four years to five years. The SEC board will be able to sack the secretary-general with a two-thirds vote.

Current secretary-general Thirachai Phuvanatnaranubala admits that SEC representatives are frequently asked during meetings of the Asia-Pacific Regional Committee of the International Organisation of Securities Commissions why politicians are allowed to head the board of the Thai securities watchdog. He said the new structure would improve the SEC's image and increase its flexibility.

"Under the new structure, no politician is able to appoint or sack a secretary-general, so I can perform my duty without thinking I owe someone," he said.

Despite the absence of a major restructuring, the Stock Exchange of Thailand (SET) underwent top management reshuffles twice this year, after Patareeya Benjapholchai took over the SET presidency mid-year.

The first surprise reshuffle came shortly after Patareeya took the helm.

The SET transferred Sopawadee Lertmanuschai from the post of executive vice president to become president of the Thailand Securities Depository (TSD). Nongram Wongvanich, who had been TSD president, became executive vice president in charge of SET corporate operations, and Vichate Tantiwanich, who was chairman of the Market for Alternative Investment, was appointed SET executive vice president.

Three months later, SET executive vice president Suthichai Chitvanich was moved from the Market Regulation Division to the Corporate Governance and Investment Relations Division.

A source said high-ranking executives were not satisfied with Suthichai's performance in prohibiting intra-day and margin-loan trades in Everland shares for 30 days from September 26 to November 7, following irregular movements in the stock's share price and trading volume.

The reshuffles raised questions in the broker community, because both Sopawadee and Suthichai are recognised as tough regulators.

2007 looks to be a challenging year for both stock regulators, as they attempt to demonstrate that restructuring can increase their efficiency.

Siriporn Chanjindamanee

The Nation