Under pending regulations due this year, all listed-company directors involved in insider trading will be automatically disqualified regardless of their board of directors’ view.
Rapee Sucharitkul, secretary-general of the Securities and Exchange Commission (SEC), announced the plan yesterday as the regulator unveiled its three-year strategy to toughen regulations and enforcement to enhance investor protection. "The regulation is being drafted. Once it takes effect this year, it will be automatically applied to all listed companies," Rapee said on the sidelines of a seminar titled "Building Confidence in the Capital Market".
Only individuals meeting SEC qualifications can serve on listed companies’ boards, but under current regulations, if a director is caught conducting insider trading, the company’s board can rule whether he or she can stay.
CP All last month faced heavy criticism when independent directors resolved that the company’s president and chief executive officer, Korsak Chairasmisak, was irreplaceable though he was fined for using inside information in share trading.
Strengthening rules and regulations between now and 2018 is necessary, as after that, the SEC as well as other key financial regulatory organisations will be subject to evaluation under the International Monetary Fund’s and World Bank’s Financial Sector Assessment Programme (FSAP), Rapee said.
He told the seminar that the SEC would revise the rules to cover all parties including listed companies, financial advisers, accounting, financial management, corporate governance, environment, social and governance (ESG) areas, investors, e-proxy systems, e-voting, and takeover codes.
"When we [achieve] the FSAP’s standard, it will challenge Thailand’s capital market to [attract] foreign investors and foreign funds to expand their investment [here]," he said.
He added that the SEC was also revising rules on the issuance of securities by both local companies and the government and corporates in the Great Mekong Subregion.
"Our three-year strategy will drive Thailand’s capital market to have rules that meet international standards and transparency, and challenge investors to expand their involvement in our market.
"We aim to be the capital hub in this region," he said.