"The SET believes that investment by institutional investors should be increased to play a larger role than their current market share of only nine percent, in spite of it being times of declining domestic interest rates. Therefore, to provide more alternatives to savers and people interested in investing in stocks, but don't have time or have constraints in investing by themselves, the SET supports the establishment of equity funds. These funds will be co-managed by investment management companies and securities companies. The SET will jointly invest 35-50 million baht in each fund on average. The SET insists this will be long-term investment and will certainly not redeem investment units within the first 24 months," the SET President said.
Moreover, the SET board also passed a resolution to adjust connected transaction rules to be more stringent by defining 'connected persons' to include persons with controlling power or persons having real authority in deciding the transactions. A person with controlling power means one who can appoint or dismiss the directors, one who can set policy, or one who has the responsibility of and acts as an executive, which is similarly defined by the SEC.
"The SET board approved the distinction of the financial assistance item to be another type of connected transaction in addition to trade items that occur as normal business with trading conditions, as well as other asset- or service-related items. This is aimed at making it easier to more strictly supervise them as they maybe vulnerable to cause listed companies huge damages," the SET President said.
Mr. Kittiratt added that there will be adjustment in the procedures, e.g. seeking approval from the company's board of directors or through the internal audit committee, significant transactions, and the requirement to disclose information more clearly. Moreover, there will also be governance measures to protect the shareholders by requiring companies to identify, in their articles of association, the connected transaction in line with the SET's regulations to enable shareholders to file cases against directors not complying with the regulations immediately.
