Common Asean D/E standard mulled for brokers

The Securities and Exchange Commission will propose at the next SEC Asean meeting that regional securities firms use a common standard for debt-to-equity (D/E) ratios.

Thailand will chair the meeting, which takes place in January.

SEC secretary-general Thirachai Phuvanatnaranubala said yesterday that a common D/E ratio should not exceed 12.

He added that he would conduct a survey of the securities and exchange agencies in each Asean member country before the proposal was tabled at the regional gathering.

If regional brokerage firms were able to use a common D/E ratio maximum, this would strengthen Asean stock markets' performance and enhance their credibility, he said, and help make Asean bourses attractive new choices for investors after the meltdown of the US financial market. Thirachai said Thai securities firms currently had a healthy D/E ratio of between two and eight.

Meanwhile the SEC chief said he would meet the Association of Securities Companies late this month to discuss the structural adjustments made by brokerage businesses.

Many of them have already adjusted their activities, while others have come up with merger plans, and some have sold off part of their operations.