Outside View

The capitalmarket master plan is a result of hard work and joint effort by the relevant authorities, including the Securities and Exchange Commission, the Stock Exchange of Thailand, the Bank of Thailand and the Ministry of Finance as well as private companies.

The work of drafting the plan was divided into four working committees:

- the drafting committee

- the productsdevelopment committee

- the law and regulation overhaul committee

- the taxreform committee.

The vision of the plan is that the Thai capital market must be the main engine to efficiently gather, mobilise and guide economic resources in the country. This is to provide maximum benefits from developing the country's potential and competitiveness. The mission of the plan is six-fold:

- To enabling investors and issuers to have easy and comprehensive access to the capital market

- to develop qualified diversity of products and services in the capital market

- to lower the cost of funds to issuers as well as lowering intermediary and transaction costs to investors, issuers and intermediary institutions

- to build efficient infrastructure in the aspects of legal, regulation, accounting, tax and technology

- to provide adequate education and appropriate protection to investors

- to promote competition in the Thai capital market and facilitate integration between the Thai market and the world's other capital markets.

The plan will lay down reform measures and "big bang" measures as follows:

- Abolish the monopoly on doing stockexchange business and push for corporatisation and demutualisation of the Stock Exchange of Thailand

- Liberalise and enhance efficiency of intermediary institutions

- Reform law and regulation for better development of Thai capital market

- Amend tax rules to facilitate the deepening and broadening of Thai capital market

- Develop new capital market products and services

- Establish a saving system for postretirement officials and workers - the socalled nation¬al pension fund

- Promote an investment culture through longterm saving

- Develop the bond market

The details of each measure are quite long and exhaustive. However, I would like to point out some examples of some measures. For the measure to liberalise and enhance the efficiency of intermediary institutions, there are details as follows:

The reforms will allow securities companies and mutualfund management companies to do comprehensive securities business on a single licence platform; liberalise licences permitting all qualified companies to do securities business; liberalise trading and commission fees; and, finally, allow trading access for foreign securities companies

The measure to reform laws and regulation will facilitae and promote the merger and restructuring of listed firms, make it more convenient for foreign portfolio investor to invest in Thailand's capital market and increase legal enforcement for any wrongdoings and misconduct in the cap¬ital market.

The drafting of the capitalmarket development master plan is almost complete.

However, there are details about action plans for the eight measures that need to be added as well as a timeframe as to when each measure and step will be completed.

Finally, key indicators for assessing the success of the implementation of the plan must be specified.

 Views expressed are the author's own.