SEC to allow funds to widen investment options

"The SEC and the association (the Association of Investment Management Companies) agreed to provide savers with a greater variety of investment options by allowing mutual, private and provident funds to invest in futures and structurednoteunderlying commodities.

This would help make mutualfund products more varied. At the same time, it can diversify investment risks," he said.

The securities watchdog will discuss the details with the Office of the Agricultural Futures Trading Commission to prepare such a move and solve potential problems.

The SEC also endorsed a proposal that high networth investors could invest in securities carrying higher risk. It will set up a working committee to establish guidelines for regulating product issuance.

Thirachai said the SEC had also agreed to consider amendment of the regulations governing longterm equity funds (LTFs) in order to allow unittrust holders to redeem their investment at any time. The aim is to increase flexibility for both holders and mutualfund companies.

At present, LTF unittrust holders are only eligible to redeem their investment twice a year, in July and December.

Meanwhile, the Thailand Futures Exchange (TFEX), which is about to launch gold trading on its bourse, said it would ask traders in physical gold to be marketmakers.

Kesara Manchusree, TFEX managing director, said the SEC, the Gold Traders Association and the exchange had met and agreed that 40 wholesale traders should be appointed as marketmakers. There are currently more than 6,000 traders in physical gold.

The traders will also be encouraged to educate and convince customers to participate in gold trading on the futures bourse. TFEX has suggested brokers pay a commission to these retail shops for any referrals.

Kesara said the exchange expected to launch gold trading on schedule next month, and would soon announce the details.

Sulin Kashyap, managing director and head of AsiaScotiaMocatta, said at a seminar yesterday that global gold futures trading was growing significantly. The volume of trading in the futures market is much higher than that in the spot market.

He added that futures trading of the precious metal would support physical gold trading, while owners of gold shops would also be able to manage their risks through the futures market.