Investment companies in the crosshairs

The Capital Market Supervisory Board (CMSB) of the Securities and Exchange Commission (SEC) has decided to prohibit securities issuing companies or “investment firms” from offering new securities to the public in order to protect interests of investors.

Ruenvadee Suwanmongkol, secretary general of the SEC, said the resolution from the last board meeting on Tuesday is to prevent investment firms from breaking the law, including regulatory arbitration.

The board has defined investment companies as companies that allocate more than 40% of their assets to passive investing, or that invest without participating in management.

This includes investments in securities, digital assets and futures, but investments for hedging purposes would be excluded.

Under the new decision, only non-investment companies could offer newly issued securities to the public.

However, financial companies are exempt from the rule, including commercial banks, finance companies, mortgage companies, securities companies, life insurance companies and non-life insurance companies.

These companies are already under the supervision of corresponding agencies, the SEC said.

Investments for cash management will also remain unchanged, including investments in government bonds, money market funds, fixed income bonds, investments in associated companies not affiliated with an investment company, investments in subsidiaries and investments aimed at creating synergy for the core business of the company. .

The CMSB has also stipulated that listed companies whose passive investments represent more than 40% of their total assets are required to disclose investment information in a financial statement to be used for monitoring.

The SEC has warned that securities issuers and listed companies that fail to comply with the new set of rules will be prohibited from offering all types of securities to investors and the general public under the Securities and Exchange Act. from 1992.