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Bangkok Post
Bangkok Post

SEC urged to rejig rules after MORE scandal

The Association of Securities Companies (Asco) and its members have proposed the Securities and Exchange Commission (SEC) adjust the regulations regarding stock manipulation in the aftermath of the More Return Plc (MORE) scandal.

The case of MORE, which is listed on the Market for Alternative, has caused damage to retail investors and the credibility of the Thai stock market as a whole, said Asco president Pichet Sithi-Amnuai, who accompanied representatives yesterday from eight brokers to submit a letter to SEC secretary-general Ruenvadee Suwanmongkol.

The Stock Exchange of Thailand (SET) suspended trading of MORE from Nov 14-18 after it noticed irregular trading of the company's shares during Nov 10-11. The bourse worked with the SEC, Asco, and related authorities in investigating the case. The Anti-Money Laundering Office ordered brokers to freeze for 90 days 34 items related to MORE and MORE-R stocks worth 5.37 billion baht, in the form of cash and other assets purchased with proceeds from sales of the two stocks.

"The SEC can request more information from Asco and they can look into the information together. To prevent such a big problem from happening again, the SEC needs to review the rules, such as those related to transferring shares between current shareholders," said Mr Pichet.

"In the past, there were channels that could cause fraud and we must find a way to close those loopholes."

Ms Ruenvadee said the lawsuits related to MORE shares are progressing and the SEC and SET have collaborated with the Economic Crime Suppression Division in the investigation.

The case is considered to be a possible "unfair action" offence, but more information is required. The SEC is ready to proceed with such information to help analyse the case and prepare a report providing information on the progress of the case at a meeting of the joint committee, which meets on a weekly basis, she said.

In terms of the SEC, Ms Ruenvadee said the regulator's work covers three main issues. The first is whether the offence is considered an unfair action.

The second refers to how securities companies and the SET can work together to develop capital markets.

The third concerns how to improve the quality of stocks, especially small-cap shares, she said.

Meanwhile, SET president Pakorn Peetathawatchai said trading in the morning session of the Thai bourse yesterday reached 23.3 billion baht, which was somewhat lower than usual.

However, he said December generally tends to see a slowdown in trading.

Retail investors stopped trading yesterday for one day to protest the government's plan to collect a tax on share sales.

The SET also informed the Finance Ministry that now is not a suitable time to initiate the tax collection.

It is unclear when the tax collection would take effect, Mr Pakorn said.

Asia Plus Securities (ASPS) agreed, saying tax collection as interest rates are rising would damage market sentiment.

Starting a new tax collection would further reduce trading and liquidity in the stock market, said the brokerage.

Next year, in particular, is unfavourable for stock investment as the global economy could potentially enter a recession, said ASPS.

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