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Lack of e-trade law an issue for CSX

THE Cambodia Securities Exchange could begin trading later this year without the Kingdom having passed its long-awaited e-commerce law, insiders said yesterday.

An e-commerce law is necessary to protect investor data in the event of a system error or crash, among other things, and therefore lends secur-ity to investors and firms hoping to trade on the exchange.  
“All the transactions are processed electronically. If we don’t have an e-commerce law, how can we operate the stock exchange?” Commerce Minister Cham Prasidh told a meeting of the US-ASEAN Business Council in Phnom Penh last week.

“That’s why I want to have the law in place before real stock operat-ions begin.”

The CSX was launched officially in July, although stock trading wasn’t expected until the end of this year.

Three state-owned companies – Telecom Cambodia, Phnom Penh Water Supply Authority and the Sihanoukville Autonomous Port – plan to be its first initial public offerings.

But whether the e-commerce law is in place by then remains to be seen. Nguon Meng Tech, director- general of the Cambodia Chamber of Commerce, said yesterday aims to enact the law before the end of 2011 were remote.

“I don’t think the law will be finalised by the end of this year because it is time-consuming, technical and complicated. It’s not easy,” he said.

At the same time, Tong Yang Securities (Cambodia) managing director Han Kyung Tae disagreed, saying that work on the law was ongoing and he was confident that the legislation would be introduced before year’s end.

Han, whose firm will underwrite the IPOs for Telecom Cambodia and Phnom Penh Water Supply Authority, stressed the importance of getting the law online so that trading could begin.

“It is crucial for us to have the relevant regulations in place, because electronic trading will happen very soon,” he said yesterday.

Cham Prasidh called on the US-ASEAN Business Council to provide the technical assistance necessary to implement the law, which must be in compliance with World Trade Organisation rules.

Although the law’s drafting pro-cess began in 2008, enacting the legislation has proved to require additional expertise.  

Even so, one insider has said trading may not be contingent on the law being passed.

Securities and Exchange Commission of Cambodia director-general Ming Bankosal said yesterday that contracts could be drawn up between investors, securities firms and stakeholders in order to avoid loss in the event of a system crash.

“Even if our e-commerce law has not materialised, we are going to set a clear mechanism to deal with [problems with the electronic system],” Ming Bankosal said.

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