SEC, leading bankers meet on overseas expansion issues
February 11, 2014 00:00 By The Nation
The Securities and Exchange Commission recently met with the Thai Bankers' Association and the Association of International Banks to discuss the banks' support for their subsidiaries' overseas expansion and for wealth-advisory services such personal asset
Vorapol Socatiyanurak, secretary-general of the SEC, said after the first semi-annual meeting of the year with top executives of local and foreign commercial banks yesterday that banks had played a remarkable role in capital-market development as they provided access to investment through hundreds of branches nationwide.
Banks can also take on another important role to support secu-rities companies and asset-management companies in their groups to seek expansion op-portunities overseas. The SEC is willing to help facilitate this and abolish regulatory impediments.
The SEC and the associations discussed the importance of financial planning. The banks’ investment consultants should be capable of providing preliminary advice for investors to raise their awareness of asset allocation. They should be able to give advice on suitable financial products for investors with the view to achieving sufficient savings upon retirement.
Since all investment consultants must be prepared to provide these services within two years, there is time for all banks to develop staff competency.
The commission asked the banks to take precautions to ensure that only SEC-approved investment consultants are allowed to give advice to investors. Their compliance with the rules must also be complete. For example, they must ask clients to do a suitability test before giving advice to them.
The SEC updated the progress of regulations on additional Tier 1 and Tier 2 instruments under Basel III, permissible to be offered to institutional investors and high net worth investors, either directly or through intermediaries.
Because of the instruments’ characteristics of high risk and complexity, investment consultants will be required to disclose and explain to prospective investors all important information before making investment decisions. The information includes terms and conditions, associated risks and effect on investors under the specified scenarios. The regulations are expected to become effective early this year.
“The commercial banks’ nationwide branches and client familiarity contribute to their crucial role in an investor’s investment decision. Accordingly, the SEC supports the commercial banks to emphasise service quality and staff training in financial planning to become a key service provider for asset-allocation advice.
“From the meeting, the SEC received useful comments and suggestions on regulatory issues, such as securities offering and selling agents, and the issue of financial literacy.
“Meanwhile, the banks’ executives obtained more information on the SEC’s policy and direction to develop the Thai capital market, which would be beneficial for the consideration of business planning,” he said.