In a public notice released on Tuesday, the Securities and Exchange Commission (SEC) in Thailand said it will introduce new minimum requirements and a code of conduct for intermediaries as it looks to respond to the rapidly-changing finance industry and advances in technology.
The new principle-based approach will alter company policy, compliance and risk-management systems, as well as risk profile guidelines. “However, a stricter work system than legally required is welcome as well,” the SEC added.
Firms must also set up an efficient complaint handling system to support their daily work.
“The SEC supervision takes into serious account intermediaries’ managerial structure and work systems to ensure protection of clients’ best interest and the overall market reliability,” said SEC assistant secretary-general Paralee Sukonthaman.
She used the example of the client acceptance process: “It must cover the know-your-client and due diligence, custody of clients’ assets and transaction verification to ensure that client services are efficient and to prevent exploitation of securities firms for improper gains.”
Under the new rules, the SEC will also be able to conduct scheduled and random inspections on businesses.
According to the regulator, the number of complaints against unlicensed firms selling securities or derivatives is on a gradual decline.
It pointed out that 75% of these complaints fall outside the SEC’s remit and claimed many involve the “illegitimate solicitation of currency exchange or agricultural products” that are often frauds or ponzi schemes.
“All of such cases have thus been forwarded to relevant authorities,” it said.