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Meeting to examine bourse regulations

Securities and Exchange Commission plans to deliberate on its proposed exchange laws

THE Securities and Exchange Commission of Cambodia (SECC) is to hold a public meeting today to consult on two draft edicts, or prakas, that regulate aspects of the proposed stock exchange.

Huot Pum, the deputy director general of the SECC, which will operate as the country's securities regulator, said Wednesday that one prakas covers the granting of licences to securities firms and their staff.

The other outlines the steps for granting approval to the operator of the securities market, the operator of a clearance and settlement facility, and the operator of a securities depository.

"This will be the first public consultative meeting on the drafts in order to get feedback and constructive ideas on the prakas before they will be issued," he said.

The meeting is scheduled to begin at 9am at Raffles Hotel le Royal.

The first draft prakas outlines the rules for organisations wanting licences to deal in securities, whether on their own accounts or on behalf of clients, or those looking to act as underwriters.

The licences would be valid for two years, but could be renewed for a further three years.

This will be the first public consultative meeting on the drafts.

The prakas proposes minimum capital requirements for such firms and the size of the bond they must lodge with the National Bank of Cambodia (NBC). The requirements differ depending on which of the three categories they wish to operate in.
Firms wishing to register as underwriters would need minimum capital of US$9.52 million, with net capital of at least $500,000 and a securities bond lodged at the NBC for $1 million.

Those looking to register as dealers would need minimum capital of $6 million, with net capital of at least $300,000 and a bond lodged at the NBC of $600,000.

And those wanting to act as brokers in the new stock exchange would need minimum capital of $1.42 million, with net capital of at least $71,000. They would be required to lodge a bond of $240,000 with the NBC.

Huot Pum said the minimum capital requirements listed in the draft prakas are not fixed at this stage.

"The [levels] we have set are just to get a reaction from the private sector or companies which wish to register as securities firms about whether they are too high or too low - this is the draft," he said. "We will gather the input and feedback from the meeting and take it into consideration so that the edict benefits all the participants in the upcoming stock market."

Han Kyung Tae, the chief representative of South Korea's Tong Yang Securities Inc, said that he cannot comment on the two drafts since he only recently learned about them.

"The minimum capital [requirement] is not the central question," he said. "There are many other aspects that need to be taken into account, such as competition, profitability, the size of the market and its growth."

Han Kyung Tae said his firm would decide whether or not to apply once it had finished looking into the edicts.
In Channy, the president and CEO of ACLEDA Bank, described the prakas as a positive step for the upcoming stock market.

"We are not looking to become a securities firm in the short or medium term because our business is banking," he said. "But ACLEDA Bank is preparing itself for a listing in the event that we need to raise capital."

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