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The SEC's board last week approved changes in the privatefund business to provide greater operating flexibility.

This means banks can now manage assets for their insurance and securities subsidiaries.

The new rules allow a company in a group to manage the group's own assets without a private-fund business licence, as long as it holds more than 50 per cent of the company that owns the assets.

This is also aimed at reducing operating costs for businesses.

Worawan Tharapoom, managing director of Bualuang Securities, said yesterday the SEC might reckon that the companies in a group owning more than 50 per cent of their subsidiaries have full control of the units.

There is no need for them to apply for a privatefund business licence in order to manage the assets of their subsidiaries. Applying for such a licence and supervision from the SEC would increase their expenses unnecessarily, she said.

An industry source said the rule change would reduce the privatefund portfolio of asset management firms as banks would turn to managing funds for their own insurance and securities subsidiaries.

Banks in the past mostly relied on assetmanagement companies to invest the funds of their group.

Out of the 24 asset management and securities companies, some nonbank affiliated firms are One Asset Management, MFC Asset Management, Aberdeen Asset Management, Manulife Asset Management, Asset Plus Asset Management, Siam Knight Fund Management, Finansa Asset Management, Merchant Partner Securities, Philip Securities (Thailand) and Globlex Securities.