“The SIPF is a fund jointly established by the SET and its 28 member companies or brokers to enhance investors’ confidence. The Fund will help assure investors investing in the SET that their assets will be protected, in two specified cases, by guaranteeing to them that compensation will remain available from the Fund.
The 1st Case is when a securities company, and a member of the SIPF, has its assets in full receivership by a court according to Thailand’s Bankruptcy Laws. The 2nd Case is when an arbitrator has made a final judgment in a commercial lawsuit between a member of the SIPF and an investor, ordering the securities company to return the investor’s assets but the company fails, for some reason, to comply with the order,” Mr. Suthep said.
Investors will be automatically protected by the SIPF when they open trading accounts with any SIPF members. No additional applications or fees will be required. The compensation paid to an individual investor will be up to the real costs of damage but no more than THB 1.0 mln. per each SIPF member.
Mr. Suthep said that: “The inauguration of the SIPF received a good response from all of the 28 brokers. Thus we believe that the SIPF’s membership includes all of the brokers focusing on retail clients.
The funds of the SIPF will be provided by the SET and the broker members. The SET will contribute THB 300 mln. (approx. USD 7.5 mln.), and the brokers contribution will be THB 200 mln. (approx. USD 5.0 mln.). The brokers’ portion will be paid as their SIPF membership fees until the total fund reaches THB 500 mln. (approx. USD 12.5 mln.).”
The membership fees will be divided into 1) An Entry Fee which will be collected from each of the securities companies which join the SIPF. The collection will start January 1, 2005. The fee will be 0.0005% of the total trading turnover beginning January 1, 2005 until the day they become SIPF members, plus an additional 25% of this calculated amount, 2) A Monthly Fee which will be collected from each SIPF member. This fee will amount to 0.0005% of the total monthly trading turnover.
As Mr. Suthep went on, “Investors can check out the list of SIPF members on the SET’s website, www.set.or.th, and SETTRADE.Com’s website, www.settrade.com. They can also notice the SIPF stickers that members received from the SET today at their brokers’ offices. The brokers’ related documents will also show an ‘SIPF’ sign, having its acronym on top of the SET emblem with a message saying “This securities company is a member of the SIPF”. The SET will oversee the administration of the SIPF through an appointed committee comprised of 6 members and chaired by Assoc. Prof. Niputh Jitprasonk.”
