Download Attachment 1 : Liberalization of Securities Business Licensing

Attachment 1
Liberalization of Securities Business Licensing
The new scheme
The SEC will replace the multiple licensing schemes currently in use with the
single license scheme that will allow package services covering a range of
securities business capabilities as follows:
1. Full Services: Allowing operation of all types of securities businesses,
i.e., securities broker/dealer/underwriter, derivatives broker/dealer, mutual
fund management, private fund management, derivatives fund
management, venture capital fund management, investment advisor and
derivatives advisor, and securities borrowing and lending.
2. Boutique Services: Allowing operation of specific securities businesses
categorized as follows:
2.1 Boutique debt services: Allowing operation of debt securities
businesses, i.e., debt broker/dealer/underwriter, investment advisor, and
securities borrowing and lending.
2.2 Boutique derivatives services: Allowing operation of derivatives
business, i.e., derivatives broker/dealer, derivatives fund management,
and derivatives advisor.
2.3 Boutique asset management services: Allowing operation of asset
management businesses, i.e., mutual fund management, private fund
management, derivatives fund management, venture capital fund
management, investment advisor and derivatives advisor, and limited
BDU.
Under the new licensing scheme, securities companies will be given
opportunities to make appropriate adjustments to their business structures, both
for domestic and outbound businesses, while the SEC will focus its roles on the
prevention of conflicts of interest. For example, the securities companies will be
able to exercise their own judgments whether to operate every type of securities
businesses within one entity or among separate subsidiaries depending on types
of products or groups of customers.
2
Upgrading operation of current licensees
- Upon meeting the fit and proper requirements, securities companies may
offer full services or boutique services on the condition that they apply for
necessary licenses.
- Reorganization of business structures is permissible such as setting up of
subsidiaries or consolidation of certain business units.
- Financial institutions with a debt securities dealing license may also apply
for a debt securities brokerage license. This is to promote debt securities
trading through commercial banks.
- Brokerage firms shall have a minimum registered capital of 500 million
baht (instead of the current 100 million baht) starting from January 1,
2012.
- Private fund management companies and derivatives brokers shall have a
minimum registered capital of 100 million baht starting from January 1,
2012. (The current requirements are 20 million baht and 25 baht,
respectively).
Issuance of new licenses as of January 1, 2012
- Eligible applicants for new licenses are newly incorporated companies in
Thailand and commercial banks established under the Commercial Bank
Laws (including local branches of foreign commercial banks) except for
the boutique debt services license that will be limited to commercial
banks, local branches of foreign banks and financial institutions set up
under specific laws.
- Eligible applicants and its executives shall meet the fit and proper
requirements.
- For business operation under Category 3 of the Foreign Business Act,
securities companies with alien shareholders in excess of 50 percent shall
also acquire permission from the Ministry of Commerce.
- Providers of full services and boutique services shall have a minimum
registered capital of 500 million baht and 100 million baht, respectively.
- The license fee for the full services and the boutique services are 20
million baht and 5 million baht, respectively.