Stock Exchange Of Thailand Announces The Consideration On AST's Brokerage Rule Infringement

Mr. Kittiratt Na-Ranong, the President of the Stock Exchange of Thailand (SET) announced that the Sub-Committee Responsible for Consideration of Offenses and Punishment for the Charging of Brokerage or Agent Fees for the Buying and Selling of Listed Securities has ruled that ABN Amro Securities Asia Public Co., Ltd. ("AST") violated the SET's Announcement of Rules and Procedures for Collecting Brokerage or Agent Fees as well as the Good Corporate Governance for Members, B.E. 2002, dated January 11, 2002, as follows.

1. The company paid incentives to nine marketing representatives who were not the ones taking orders or giving advice to the customers stated in the remuneration calculation. Rather, the branch manager handled those accounts and took orders for the customers. As a result, these nine marketing representatives received incentives in excess of 25% of the brokerage fee. Moreover, it was found that one of them got an account transferred from the branch manager and then paid the incentives back to the manager in return.
2. The company permitted the transfer of accounts and remuneration from four marketing representatives to three other marketing representatives retrospectively, whilst the beneficiaries did not actually handle the accounts generating the transferred incentives. Hence, the transferees received incentives that were in excess of 25% of the brokerage fee. And, after the transfer of accounts, one of the transferees still had not handled the account instead of the transferor.
3. The company permitted one of the marketing representatives to bring clients to open trading accounts with the company, while the representative was still employed by a former company. The company calculated the compensation based on the said clients' transactions that occurred during the time when this marketing representative was not yet employed by the company.
4. As for the executives responsible for overseeing these matters, who must be held accountable under Article 27 of the regulations, the Sub-committee held that they failed to supervise the company's operations in a prudent manner. In particular they failed to oversee the compensation payments to the marketing officers who did not actually handle their customers' accounts, the transfer of clients' accounts and transactions among their marketing officers, as well as the opening of accounts for clients of the new marketing officer (in number 3).

"By virtue of Articles 18, 25, 27 and 28 of the aforementioned regulations, the Sub-committee has passed a resolution to fine the company 1,800,000 baht, pending the determination of the punishment for one executives involved in granting permission for the account and trading turnover retrospectively prior to effective date of employment. Should they be involved in any further violation within 30 days after the notification from the SET, they shall be dismissed as per Article 27 of the regulations." Mr.Kittiratt said.

He went on to say that: "Moreover, the Sub-committee resolved that the company punished the three marketing representatives involved in the cases, and that the company shall impress upon the four executives involved to strictly supervise and to be in compliance with the SET's rules and regulations. The fifteen marketing representatives have also been urged to be more careful and to strictly comply to the rules."