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Published on August 27, 2007

Demutualisation occurs when institutions convert themselves from mutual organisations owned by their members/customers to profit-making companies.

"The SET's demutualisation is not a priority task because it depends on the ongoing amendment of the Securities and Exchange Act. Amending the law is a time-consuming process and I'm not sure if the demutualisation can be completed within my tenure. However, I asked the SET's board of governors to consider if the current structure is too clumsy while we are waiting for the law to be amended," he said.

"It is too early for me to say if the SET's structure is too clumsy, but I think the SET has many subsidiaries and some are passive while others are active. Demutualisation is necessary for the Thai stock market if we don't want to be a laggard in the international arena. There are only four stock markets in the region - China, Thailand, Indonesia and Vietnam - that have yet to demutualise."

The SET's cost to income ratio is 94 per cent, compared with the average for stock exchanges of 73 per cent, and the figure suggests that the SET's efficiency should be improved, he said.

Pakorn, former secretary-general of the Securities and Exchange Commission, took office as the SET's chairman on Wednesday and has a two-year term. He is also chairman of Thailand Securities Depository and the Thailand Futures Exchange.

Under his tenure, he said he would encourage the Government Pension Fund, the Thai Investors Association and other institutional investors to play a greater role in promoting corporate governance among listed companies. He will focus on fast and complete information to be disclosed by listed companies as part of measures to protect shareholders.

Piyarat Setthasiripahiboon,

Oranan Paweewun

The Nation