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Country

Thailand

1. Organization

The Securities and Exchange Commission, Thailand (

SEC

)

ส ำนักงำนคณะกรรมกำรก

ำก

บหลักทรัพย์และตลำดหลักทรัพย์


SEC is an independent state agency, responsible for supervision and development of the country's
capital market system under the direction and guidance of the SEC Board and the Capital market
Supervisory Board.

Their prime roles are to formulate policies,

rules and regulations regarding the supervision, promotion,
and development of securities businesses as well as other activities pertaining to the securities
businesses. The policy objectives of the SEC in supervising and developing the capital market are

as
follows:

1)

To maintain fairness in capital market;

2)

To develop and enhance efficiency of the capital market;

3)

To maintain long
-
term stability of the financial system; and

4)

To strengthen international competitiveness of the Thai capital market.


2. Board
Composition and
Members

The SEC Board is responsible for policy making and rule issuing pursuant to the Securities and
Exchange Act (SEA) and the Derivatives Act B.E. 2546 (2003). The SEC Board comprises of:



Chairman appointed by the Cabinet upon the
recommendation of the Minister of Finance;



Three ex
-
officio members who are the heads of specific governmental organizations, i.e., the
Permanent Secretary of the Ministry of Finance, the Permanent Secretary of the Ministry of
Commerce and the Governor of
the Bank of Thailand;



Four to six expert members appointed by the Minister of Finance under nomination process by the
Nominating Committee, among whom there shall be at least one expert from each of the following
fields: legal, accounting and finance;



SEC
Secretary
-
General appointed by the Cabinet upon recommendation of the SEC Board as Board
member and Secretary.


The Capital Market Supervisory Board (CMSB) is responsible for issuing rules and regulations
governing operational matters so that the SEC Board

can focus on policy matters with regard to
supervision and development of the overall market. The CMSB comprises of:



SEC Secretary
-
General as Chairman;



An SEC Deputy Secretary
-
General assigned by the Secretary
-
General



Director
-
General or a deputy Director
-
General of the Fiscal Policy office under the Ministry of
Finance



Not exceeding four expert members appointed by the Minister of Finance under nomination process
by the Nominating Committee, at least two of whom must have experience in managing listed
com
panies or securities firms;



An officer of the SEC appointed by SEC Secretary
-
General as Secretary.


Are the majority of the governing body non
-
practitioners



Yes


No

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3. Funding arrangements

The SEC office is established through a start up

fund from the Ministry of Finance and the Bank of
Thailand.


Ongoing operations are funded through a levy on market participants mainly the Stock Exchange of
Thailand, listed companies, and market intermediaries i.e. securities companies and assets manage
ment
companies. This income is used to fund all activities and all departments under the SEC including the
audit inspection unit.


The SEC is free of any influence or what so ever by the profession.


Is the funding free from undue influence by the profes
sion



Yes


No

4.
Inspection system

Enhancing the quality of financial reporting system is the key factors for raising Thai capital market
standards and lead to the Thai capital market development. Therefore, the SEC aims to develop its
capacity to
monitor and enforce the application of high quality accounting and auditing standards.


The SEC has direct responsibility over a supervision of the auditors of securities issuers and market
intermediaries (i.e., listed companies, securities companies,
asset management companies and collective
investment scheme) which cover most of the public interest entities.


The SEC requires auditors of companies under the SEC's supervision to hold certified public accountant
(CPA) license and pass the criteria of au
ditors for public companies. The approved auditors must have
professional knowledge of public company accounting standards and perform their audit work
prudently, carefully and professionally in accordance with auditing standards. In case of negligence or
breach of duties, the SEC will pursue administrative sanctions, ranging from warning, probation,
suspension or revocation of approval, against such auditors. The approved auditors must re
-
new their
license every 5 years.


Moreover, the SEC has an independ
ent public oversight system which emphasizes on the supervision of
audit firms’ quality assurance system apart from quality of individual auditors’ work. The audit firms
are required to have quality assurance system in compliance with international standar
ds. The SEC
inspects the audit firms periodically to ensure that they have an adequate and reliable quality assurance
system. Individual auditors must be registered with audit firms that have quality assurance system.
Moreover, the periodic inspections of
audit firms is carried out under a risk
-
based approach
methodology every year for Big
-
4 audit firms and at least every three years for small and medium audit
firms.


The SEC staff carries out inspection of audit firms’ quality assurance system in accordanc
e with
international standards i.e. the assessment of the management responsibility policy, ethical
requirements, acceptance and continuance of client relationship, human resources, engagement
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performance, monitoring, assessment, and documentation of quali
ty control.


The SEC appointed a Quality Assurance Review Panel (

QARP

), comprising of reputable and
respected auditing experts who are former audit practitioners with long
-
standing experiences. To ensure
that QARP is independent from the audit professio
n as well as to avoid unnecessary conflict of interest,
each panel member shall have a cooling
-
off period from the audit practices for more than 3 years. The
QARP will provide guidance on the audit supervision processes to the SEC staff including the quali
ty
review policies and procedures, the overall inspection plan, the result from the inspection of audit firms’
quality assurance system, and the disciplinary sanction.


Do you have the responsibility for recurring inspections of audit firms

undertaking aud
its of public interest entities



Yes


No


Is this responsibility directly or through oversight of inspection undertaken

by professional bodies



Directly


Through oversight


5.
Audit and Financial Market

There are approximately
599

listed companies,
40

securities companies,
24

asset management
companies. About
14
6

individual auditors from
26

audit firms are registered under the SEC's
supervision. The majority of audit work of listed c
ompanies (approximately
76
%
)
is

performed by the

Big 4 firms,
as measured by market capitalisation.

6. Main other tasks performed by
Member

-

Monitoring financial statements of listed companies and Initial Public Offering companies (IPO) as
well as ongoing monitoring of auditors' reports and relevant w
orking paper to ascertain that financial
statements of listed companies are trustworthy, in compliance with accounting standards, and sufficient
disclosure of material information for investors in making investment decision.

-

Analyzing financial statemen
ts and news related to listed companies to identify transactions or event
that may affect financial statements and act promptly for further clarifications from such listed
company's managements, auditors, financial advisors, or any other parties involved i
n such activities.

-

Undertaking a comprehensive study of the new amendment of International Financial Reporting
Standards (IFRS), the International Auditing Standards (ISA) and Code of Ethics for Professional
Accountants.


7. Other information

Website:

www.sec.or.th

Address:

Securities and Exchange Commission


16th Fl., GPF Witthayu Towers,


93/1 Wireless Road, Lumpini, Patumwan,


Bangkok 10330, Thailand


Contact Person:

Mr. Thawatchai Kiatkwankul


Director of the Accounting Supervision Department


Em
ail:
thawatch@sec.or.th

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Tel: (66) 2695
-
9584


Fax: (66) 2695
-
9792

8. Major Events and Activities

-

From
October 2010 to
December

201
2



the SEC
has
completed its first inspection cycle and
all of
audit firms
(26 audit firms)
whose auditors registered with the SEC have already
been

fully

inspect
ed
by the SEC

and the inspection report of each individual firm has been distributed to every firm
.

-

In May 2012 SEC published the 2011 Independent Audit Inspection Act
ivities Report on its website to
demonstrate the robustness of Thailand audit oversight system.

-

Since

2011
t
he ASEAN Audit Regulators Group
has
held

a meeting regularly to exchange
information, technical knowledge, and experiences in audit oversight as w
ell as encourage cooperation
in many means.
I
n January 2012 and 2013, SEC staff

attended the ASEAN Audit Regulators Inspection
Workshop held by the ACRA at Singapore

and AOB at Malaysia, respectively

together other ASEAN
member countries
.

-

In 2012,
Asian Corporate Governance Association (ACGA) and CLSA Asia
-
Pacific Markets
conducted CG Watch 2012


a survey on corporate governance of Asian capital markets.
T
his year,
Accounting and Auditing (IGAAP)

is the category that Thailand faired significantly w
ell which is
moved up from 73% to 80%

due to

the SEC’s independent oversight system and its strict supervision on
audit quality assurance on par with international standards.
As a result, among 11 countries,

Thailand is
ranked at the second place following

Singapore in this area
.

-

January 5, and December 20, 2012

T
he SEC held seminar
s

on the topic of

Common Deficiencies
Found from Quality R
eviews

for the registered auditors.

-

September 6, 2012


The SEC
held a seminar for audit committee (“AC”)
to state how importance of
the auditors’ role in supporting performance of
AC

of listed companies in order to assure quality of
audit and financial reporting thereby elevating corporate governance standard and enhancing investors’
confidence in capital mar
ket.

-

Currently
, EU
has been

in the process of consideration Thailand as an equivalent country which this
recognition will facilitate EU Member States to rely on supervisory work of Thailand’
s

oversight
system and facilitate Thai listed companies to raise fund in EU countries.