Capital Markets in Thailand are strictly regulated and controlled. According to the FTSE classification of markets as at September 2016, Thailand’s capital market is ranked in tier 2, or in the ‘Advanced Emerging‘ group, which can guarantee the creditility of a country’s capital markets. However, the stringent regulations do not practically create barriers to asset management firms or investors, but they are aimed at enhancing investor protection.
Securities businesses are regulated by the Security and Exchange Commission of Thailand (SEC), and their operators are required to obtain a securities license.
The Type-C securities licensees are allowed to undertake securities business in various categories, which cover all ordinary course of business undertaken by asset management firms, as follows: (a) mutual fund management, (b) private fund management, (c) securities brokerage of investment units, trust certificates of trust having similar characteristics as mutual funds, or any other securities prescribed by the SEC as securities, which have similar characteristics to investment units, (d) dealing in securities, as specified in (3), (e) underwriting of securities as specified in (3), (f) investment advisory services; and (g) venture capital management.
For a Type C license, the applicant must fulfill the following requirements: (a) Be a private or public company incorporated in Thailand, (b) Have its paid up registered capital of not less than Baht 100 million, (c) Not having reasonable grounds to believe that the applicant has financial conditions that are likely to cause damage, or any other circumstances indicating the applicant’s financial hardship. In addition, there are no reasonable grounds to believe that the applicant has any deficiency, or is not appropriate in regard to control and sound business conduct, (d) Be able to maintain capital funds, and set aside reserve capital in compliance with the laws establishing such legal entity, or the laws controlling the business undertaking of such legal entity.
Application fee for a securities business license: Baht 30,000 per application. Securities business license fees: Baht 5,000,000 per license.
There is no foreign direct investment limit or foreign ownership restrictions for a company that wishes to apply for the license.
Data from the SEC’s website shows that as at 13 June 2017, there are 25 asset management firms, which have been granted the license, and which are operating in Thailand. According to the annual report of 2016 prepared by the SEC, asset management firms, which are subsidiaries of 12 commercial banks, accounted for 94% of the market share.
Athistha (Nop) Chitranukroh
Piyanuj (Lui) Ratprasatporn