Download GnþrkarImUlbRtenAkmSECURITIES

គណៈកម្មការម្ូលបត្រកម្ពុជា (គ.ម្.ក.)
Securities and Exchange
Commission of Cambodia (SECC)
Overview of Cambodia Capital Market
Kao Thach, LLB (F.L.E), LLM (Bond)
Deputy Director General
Securities and Exchange Commission of Cambodia
1
Present Financial System in
Cambodia
Present financial system in Cambodia
Players in Financial Sector:
●
Banking system:
 The central bank, that is the National Bank of Cambodia with its 21 provincial
branches;




31 commercial banks (22&9), 7 specialized banks;
31 (MBIs 7) Licensed Microfinance Institutions; 28 Registered MFIs
International Reserve: 3.213 Bil
Loan to Deposit: 88.3% (2011)
●
6 General Insurance Co., & 1 Re-Insurance
●
No inter-bank/money market
●
15 securities Firms and 1 Cambodia Securities Exchange
●
Active foreign exchange markets due to high degree of dollarisation ( more than
90% of banks transactions in US$, large volume of USD cash in circulation).
Bank-based system VS. Market-based
system?
Alan Greenspan’s Pumping Philosophy
Sequencing to create Securities
Market in Cambodia
6
Feature of Cambodia Capital
Market
Primary Market
“Demand”
“Supply”
“Intermediary”
“Infrastructure”
8
Secondary Market
CSX
Cambodian Securities Exchange
Intermediaries
Intermediaries
Clearance and Settlement
Operator19
Investor
Issuer
Registrar
Securities Depositories
CSD
Transfer
Agent
Paying
Agent
Cash
Settlement
Accounting
Firms
Law
Firm
Appraiser
Firm
CRA
Others
Capital Requirements for intermediary
Capital
Securities
Requirements Underwriter
Securities
Dealer
Securities
Broker
Investment Advisor
25 billion riels 6 billion riels
(~ USD 6.25
(~ USD 1.5
million)
million)
400 million riels (~ USD
100,000)
Minimum Capital
40 billion riels
(~ USD 10
million)
Net Capital
2 billion riels
1.25 billion
riels
300 million
riels
Securities Bond
4 billion riels
2.5 billion
riels
1 billion riels
Non required, but:
-Proper location
with equipped
office
- Licensed Adviser
80 million riels
(~ USD 20,000)
10
Human Resource requirement for intermediary
Human Resource
CEO and director or
partner
Head of securities
representatives
Head of operations
Compliance officer
Other qualified staff
Other Requirements
Physical facilities
A 3-year business plan
Comply with
requirements for risk
management and internal
controls
A risk management plan
Satisfy other
requirements stipulated
11
Public Limited Company or SOEs
• to make a public offering shall fulfill the following
requirements:
– Shareholders’ equity shall not less than KHR 5,000,000,000
(five billions) at the date of filing the application;
– Issue size shall not be less 20 % of shareholders’ equity at
the latest balance sheet (shareholders’ equity < KHR
20,000,000,000 (twenty billions)) and;
– Issue size shall not less 15 % of shareholder’s equity at the
latest balance sheet (shareholders’ equity is > KHR
20,000,000,000 (twenty billions) or more);
– Net profit shall not be less than KHR 500,000,000 (five
hundreds millions) for the latest full financial year prior to
the date of logging application
– Aggregate net profit shall not be less than KHR
1,000,000,000 (one billion) for the latest 3 financial years
prior to the date of filing application;
12
Public Limited Company or SOEs
 obtain eligible listing from the Stock Exchange
 approval from the SECC and register the disclosure
documents with the SECC (Law: Art. 12, Anukret:
Art. 9, 10, 11 & 13).
 fully responsible for accuracy, adequacy and
reliability of information containing in the
disclosure document (as well as securities firm and
any expert).
 Have the signature of the Chairman of Board of
Directors, Directors, CEO and CFO on disclosure.
13
Corporate Governance of PLCs
• The Board shall be composed of at least 05 and
not more than 15 members.
• At least 1/5 independent directors (ID).
• foreigner as independent directors, those shall
have working experiences in Cambodia at least
06 months before becoming ID
14
Corporate Governance of PLCs
• The Board shall constitute committees to assist and ensure
good corporate governance:
– Audit committee,
– Risk management committee,
– Nomination committee and other.
• Risk management committee for public listed company has
asset from KHR 200,000,000,000 (two hundred thousand
million) and over.
• The public listed company had asset less than KHR
200,000,000,000 (two hundred thousand million) may
consider to have Risk management committee if necessary.
• The public listed company has asset less than
200,000,000,000 (two hundred thousand million) Riel, the
duties of the risk management committee may be carried
out by the Audit Committee.
15
Securities Investors: Individual or Institutional
•
We believe that

To attract investments, genuine market transparency and efficiency must be
firmly established

For individual investors, investor protection and education are critical

For institutional investors and foreign investors, legal and regulatory
impediments must be mitigated in phases.
•
Individual Investor: Cambodian Savers, foreigners, any
investing public
•
Institutional Investor: Banks, Social Securities Fund,
Insurance Company, Investment fund…
16
Feature of the Cambodia Securities Exchange
 CSX
 The
CSX should take on a for-profit organizational form.
 KRX

is a joint stock company : RGC 55%, KRX 45%.
take part in the management of CSX.
For efficiency: to integrate trading, clearing/settlement, and depository
functions in the CSX.
 Electronic
auction mechanism: CSX is equipped with electronic systems
that can cover all functions related to trade flow.
 Adopt
a dematerialized form.
 Establishment
of DvP and T+2
17
Feature of the Cambodia Securities Exchange
 How many times do investors trade a day?

Twice a day, at 9:30 am and 11:30 am

Execute orders use a periodic call auction after collecting orders for an hour.
− Later, may adopt the periodic call auction more frequently, then eventually, adopt the
continuous call auction.
− When adopting the continuous call auction, the CSX will equip with block trading facility,
various order types, etc
 Price limit system: Apply very tightly price limit around 5%

The implementation of a tight price limit system and the establishment of a T+2 settlement system
are pre-requisite mechanisms to prevent the Cambodian securities market from possible market
turmoil arising from the pre-maturity of the securities market in the Introduction Stage
18
Requirements for Operators

Operator of Securities Market:





Operator of clearance and settlement facility





A company incorporated and registered in Cambodia
Capital is not less than KHR 20, 000 millions
Suitable clearance and settlement system
Enough human resource
Operator of securities depositories





A company incorporated and registered in Cambodia
Capital is not less than KHR 40, 000 millions
Suitable trading system and floor
Enough human resource
A company incorporated and registered in Cambodia
Capital is not less than KHR 20, 000 millions
Suitable and secured depositories system and place
Enough human resource
Possible 3 in 1:





A company incorporated and registered in Cambodia
Capital is not less than KHR 80, 000 millions
Suitable and compatible system for each operator
Clear and Firm Firewall or Chinese wall between 3 operators
Enough human resource
19
Insurance Sector
Premium=USD2.3 million in 2000 and 8.8 millions in 2003 to USD24.906 million
in 2010. (3 folds from 2003 and 11 folds from 2000)
Trend of Gross Premium
2003-2010
30,000,000.00
25,000,000.00
20,000,000.00
15,000,000.00
10,000,000.00
5,000,000.00
2003
2004
2005
2006
2007
2008
2009
2010
(unaudited)