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Amendments to SEC Act likely by year-end
Bangkok Post – 9 November 2007
NUNTAWUN POLKUAMDEE
Amendments to the SEC Act could take effect by the end of the year, according to Prasong Vinaiphat, the deputy secretary-general of the Securities and Exchange Commission.
The changes will help increase corporate governance among listed companies, strengthen protection for general investors and overhaul the general structure of the SEC board.
Mr Prasong said under the amendment, the cabinet would appoint a person with expertise about the capital market as SEC chairman. Currently the finance minister takes the position by title.
The new law, which is now under review by the National Legislative Assembly, also gives the cabinet the power to appoint and dismiss secretary-general positions.
Mr Prasong said the SEC board would be split into three levels, with the SEC board overseeing general capital market policy and development strategy.
A capital market board will have regulatory power over brokers and asset management companies, while the SEC office board will oversee office operations. Mr Prasong said the new SEC board would be set up within 30 days after the new act is implemented.
Half of the current board would be dismissed by random draw; those who remain would serve for no more than another three years. New directors would have a six-year term.
''Under the new structure of the SEC board and management, we hope to see increased work efficiency. The chairman will also work full-time with the SEC,'' Mr Prasong said.
The new act would also increase company responsibilities to shareholders and strengthen investor rights.
Company secretaries would have a clear responsibility to report events of annual shareholder meetings and maintain documents over the past five years.
Shareholders representing more than 5% of total outstanding shares would have the right to propose agenda items, although company management can reject the proposal if it doesn't benefit general shareholders.
Investors will also have greater leeway to file suit and seek damages against company executives for fraud. Executives will also be prohibited from evading responsibility by citing board decisions.
The new SEC Act also allows for payments to whistleblowers providing evidence of share manipulation to securities regulators. Witnesses can receive up to 30% of the damages incurred in a case.
The law also forces greater disclosure of parties acting in concert to hold shares in a listed firm. Shareholders deemed to be acting in co-operation would be required to file a tender offer if their collective shareholdings exceed the 25%, 50% or 75% trigger levels.
Company executives will have more freedom to issue warrants, convertible debentures or common stock as a takeover defence assuming prior shareholder approval.
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