"Currently, there are five brokers that have their own stock-investment portfolios, and we've asked them to report," SEC senior assistant secretary-general Pravej Ongartsittigul told reporters at a press briefing yesterday.

"At the same time, we will keep an eye on brokers with high cash flow but low registered capital, because these companies are always a takeover target, and the new investors might use money in a way that is not proper. From our initial survey, we found that one-third of brokers are companies with high cash flow, but low registered capital," he said.

The securities watchdog also monitors stock investments of listed companies but does not request listed companies to report their investments, because it does not have any mandate to do so, Pravej said.

"We do not have the authority to ask them [listed companies] to submit their investment reports because it is within their rights to privacy and they already have their own directors and shareholders to monitor their activities. All we can do is monitor their trading transactions on the Stock Exchange of Thailand, and the exchange is the first point to check," said Pravej.

Commenting on the survey of brokers' financial positions, he said all 39 active brokerage houses had a net capital ratio of 100 per cent, compared with 7 per cent required by the securities watchdog.

For risk management in internal affairs, customer relations and information technology, local brokers have made significant progress.

"We're quite satisfied with the overall picture of supervision in brokerage houses, because their standards are improved. We conduct an annual survey on risk measurement ranking that will benefit investors and all related parties," he said.

Siriporn Chanjindamanee

The Nation