Brokers seek direct say on SET demutualisation

A source from the Association of Securities Companies (Asco) said brokers had recently written to the Securities and Exchange Commission (SEC), requesting representation on the task forces.

Under the demutualisation plan, the SET, which currently operates the equity bourse as well as supporting market development, would separate these roles into SET functional operations on the one hand and a Capital Market Development Fund (CMDF) on the other.

The move forms part of the SET's capital market development plan, which aims to boost the competitiveness of the equity bourse as rivalry among global stock market operators intensifies.

The Asco source said that because the brokerage industry would be directly affected by the change, the Finance Ministry, SET and SEC should provide securities houses with an opportunity to directly participate in the plan.

Officials are currently working on draft amendment of the Securities and Exchange Act to accommodate the SET's demutualisation. A bill will be produced for Cabinet consideration, before being sent to Parliament.

However, the source said that in the opinion of brokerages, some issues needed further discussion and change before a bill is agreed upon.

There are currently seven members of the task force for SET demutualisation: two from the SEC, two from the Finance Ministry, and three from the SET, including the bourse president.

There are no brokerage representatives on either this task force or the one set up in relation to the CMDF, the source said.

"So, in February we [Asco] submitted a letter asking for our representatives to be on the taskforces. This is a big issue. People from the industry, if allowed to participate, would help provide useful views," he said.

Thirachai Phuvanatnaranubala, secretarygeneral of the SEC, said it was the duty of the Finance Ministry to set up the task forces.

While the SEC has yet to form an opinion on the Asco proposal, he said there were already representatives from the SET on the task forces and the brokerage firms already have their representatives on the SET's board of directors. Therefore, they can propose their ideas via the SET.

"Brokerage firms already account for more than half of the SET's board of directors. They can propose their ideas via the SET," Thirachai said.