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President Kampanart Lohacharoenvanich yesterday said he was not sure right now whether the new collateral requirement would come into effect from mid-year.

"I cannot identify when, because that depends on the board of the Stock Exchange of Thailand (SET). The association has already forwarded the issue to the SET. I cannot say for sure whether it will be implemented mid-year," he said.

The higher requirement is to prevent risk and assure investors, he said.

Kampanart added that the new requirement would not hurt stock-market sentiment and retail investors, because all brokers already required front-end collateral of 10 per cent.

As of the end of last November, there were 503,124 stock accounts in Thailand, with cash accounts dominating 81.47 per cent of trading volume.

Meanwhile, the board of the Securities and Exchange Commission (SEC) has granted approval for Thai brokers to open branches abroad if their financial positions are strong and they are ready to operate outside of the Kingdom.

For domestic branches, the securities watchdog has allowed managers to supervise more than one branch.

The SEC has also relaxed regulations governing securities borrowing and lending (SBL) by allowing investors to borrow securities

from the Thailand Securities Depository and other foreign depositories.

The securities watchdog has given permission to include cash in all currencies, all types of securities with an exception of warrants, unit trusts of open-ended funds with redemption each trading day and proceeds from recent short-sale transactions as the required initial margin.

Each broker at the end of the trading day may extend margin loans and lending securities to a particular customer not exceeding 25 per cent of the net capital rule and to all customers not exceeding fivefold of the net capital rule, in order to prevent lending-concentration problems, an SEC statement said.

The SEC has allowed customers who receive approval from brokers to make SBL transactions through cash accounts, in addition to margin-loan accounts.

Siriporn Chanjindamanee

The Nation