Thailand Futures Exchange PCL (TFEX) - under the Stock Exchange of Thailand (SET) group, together with The Agricultural Futures Exchange of Thailand (AFET), The Office of the Agricultural Futures Trading Commission (AFTC) and The Securities and Exchange Commission (SEC) have joined hands to consolidate Thai agricultural futures exchange under TFEX’s management following the government’s policy, ensuring more efficiency and minimizing trading cost, while aiming to expand internationally.
Under the merger plan, AFET, currently operating Thailand’s agricultural futures market, will be merged with TFEX, offering a fully integrated trading, clearing, settlement and depository services of derivatives products. This aims to form one single futures market for all, in order to enhance the efficiency and provide benefits to investors in doing one-stop trading markets for all futures products.
Sathit Limpongpan, Chairman of SET and TFEX, stated, “The merger deal is in line with the global trend to enhance operational efficiency and reducing transaction cost for investors’ benefits. We strongly believe that both domestic and foreign investors can more conveniently trade agricultural futures products through one single derivatives platform provided by TFEX, while placing required collateral at one location only, resulting in effective cost management. Forward looking, the market will be more easily internationalized, linking to the global network, for the benefit of investors, entrepreneurs and the Thai economy.”
SEC Secretary-General Vorapol Socatiyanurak said, “SEC is very pleased to support this merger. In January 2015 SEC approved three key principles covering: 1) products and markets 2) entrepreneurs 3) employees, in order to facilitate smooth integration considering overall picture of futures markets and stakeholders, consisting of entrepreneurs, investors as well as members of AFET and AFTC. The SEC has been meeting occasionally with members of AFET and AFTC to exchange opinions, as such the process has made a great progress in many aspects. This merger is a vital step for the futures market development in diversifying products and increasing supervision efficiency. This will increase competitiveness of the Thai capital market, providing benefits to entrepreneurs and the Thai economy.”
AFET Chairman Chaipat Sahasakul said, “AFET has continuously supported the collaboration with TFEX in the merger. We also have transferred to them the settlement and delivery know-how of agricultural futures products. In addition, we have prepared member brokers to be ready to become TFEX’s members. This integration will benefit investors and stakeholders including AFET’s members with opportunities to expand their businesses. We appreciate TFEX and the SEC’s cooperation and support to AFET in enhancing the Thai agricultural sector.”
AFTC Deputy Secretary-General Prayuth Sirisawatpipat said, “In accordance with the Ministry of Commerce’s policy, AFTC supports this integration to enhance agricultural futures market for the Thai agricultural sector and to manage the reference price in benchmarking with the global price. AFTC has been coordinating with stakeholders for inputs to amend the Agricultural Futures Trading Act so as to allow TFEX to trade agricultural futures products. AFTC has also facilitated AFET’s members and investors in transferring their trading rights from AFET to TFEX. All these will truly benefit the companies and investors.”
The four organizations have continuously prepared for the integration, especially the regulations and systems. The implementation will start immediately after the Agricultural Futures Trading Act and related laws are in effect. Meanwhile, AFET’s members are being prepared to be TFEX’s members so as to continue trading seamlessly. After integration, all agricultural futures products will be traded under TFEX’s trading systems. The clearing and settlement can only be done at Thailand Clearing House Co., Ltd, under the SET group. TFEX investors can trade agricultural futures products by using their existing futures accounts with TFEX brokers. AFET investors will be able to hold on to their contract until expiration with their current AFET brokers, or open new TFEX futures trading accounts if they wish to trade financial futures products.