More alternatives for offshore investments

The statement was issued after the meeting of the Securities and Exchange Commission, the Bank of Thailand, the Fiscal Policy Office, the Stock Exchange of Thailand, the Association of Securities Companies and the Association of Asset Management Companies. They agreed that the SEC should provide more flexibility of offshore investments for domestic investors as summarised below:  

1. An institutional investor is allowed a quota of up to US$50 million only when offshore investments are made through authorized securities brokers or purchased from authorised securities dealers;

2. A general investor is allowed a quota of up to US$5 million only through authorized private fund operators, but investments in securities listed on regulated exchanges may be made through authorised securities brokers;

3. Authorised securities business operators shall report their clients' offshore portfolios in compliance with the Bank of Thailand's rules and procedures.

Foreign currency-based offshore securities shall be solicited exclusively to local institutional investors and private funds through securities business licensees in compliance with the SEC's securities issuance regulations.

In addition, to increase product diversification on the Stock Exchange and business opportunities for local securities firms, the SEC will allow listing and trading of foreign securities in the following forms:

1. Transferable Custody Receipts of such products as leading foreign stocks and those of Exchange Traded Funds: and

2. Foreign companies' stocks listed on the Stock Exchange, the rules and conditions for which are under the SEC's consideration.  

Up until now, the Bank of Thailand has allowed only mutual funds, provident funds and proprietary portfolios of securities and asset management companies to undertake offshore investments. 

The SEC Secretary-General Thirachai Phuvanatnaranubala said: "These new criteria mean more alternatives for private funds as well as institutional and general investors to invest abroad with the benefit of professional services and advice. Likewise, asset management and securities companies will be able to make the most of diverse business opportunities."

Maris Tarab, Chairman of the Association of Investment Management Companies, said: "Under the new rules, our estimate for eligible overseas investments of private funds is 120 billion baht or around 5 percent of the 2.3 trillion baht total of commercial bank deposits of at least 10 million baht per account of natural persons and private sector juristic persons as of the end of May 2007. This excludes the collective 700 billion baht deposit total of non-profit foundations, savings cooperatives, insurance and life insurance companies." 

- The Nation