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Published on October 25, 2007

SET executive vice president Sithichai Chitvanich said yesterday the board agreed that executive partners would enable local brokers to enlarge their customer bases and prepare themselves for industry liberalisation in 2012.

Under the regulations governing executive partners, each local broker can sign a deal with only one foreign broker as an executive partner, to send transactions.

Brokerage fees levied on executive partners must not be less than 0.15 per cent of transaction value, and the executive partners must transfer technology and know-how to the local firms.

In 2010 and 2011, brokerage fees will change to a "ladder" of rates, under which fees greater than Bt20 million will be negotiable between local brokers and their executive partners.

The regulations governing executive partners have drawn criticism from some brokers who claim they can be exploited by offering cheap fees to executive partners in return for trading volume.

The SET board also extended the present minimum brokerage fee levied on Internet traders - 0.15 per cent of transaction value - until the end of 2009.

"The board agreed that the rate could increase the number of Internet traders this year by 19 per cent.

"Moreover, online stock trading volume has doubled," Sithichai said.

Meanwhile, the board has agreed to extend for two years the period during which local brokers can offer their marketing officers a maximum return of 27.5 per cent of brokerage fees.

However, the board will ask local brokers to factor marketing officer performance evaluations into return payments as this can help improve services and restore investors' confidence, Sithichai said.

The SET will schedule a hearing on the issues before they are forwarded to the Securities and Exchange Commission for final approval.

The Nation