Cambodia's security regulator has slashed transaction fees on securities by half in its latest bid to stimulate interest in the Kingdom’s lacklustre stock exchange.
Sok Dara, deputy director of the Securities and Exchange Commission of Cambodia (SECC), said a decision was made last week to reduce the trading fee, clearance and settlement fee, and depository fee on securities by 50 per cent, effective immediately.
“The securities trading fee has been reduced to 0.075 per cent; while the settlement and clearance fee has been dropped to 0.05 per cent, and the same rate applies for the depository fee,” he said.
Dara said the adjustment is aimed at encouraging brokerages and traders to participate in the capital market. Securities firms and investors engaged in trading will pay the reduced fees directly to the Cambodian Securities Exchange (CSX).
Cambodia’s pint-sized bourse began trading in its first listed company, Phnom Penh Water Supply Authority, in April 2012. It currently trades two other firms – Grand Twins International, a Taiwanese-owned garment company, and Phnom Penh Autonomous Port (PPAP), the capital’s river port operator.
The SECC has struggled to attract new investors to the stock exchange. Last September it introduced a new board with more lenient listing requirements aimed at encouraging small- and medium-sized enterprises to list.
It has also offered tax breaks for listed firms and has raised or lowered securities transaction fees several times already in an effort to stimulate market activity.
Svay Hay, president and CEO of Acleda Securities, welcomed the SECC’s latest move to reduce transaction fees on securities, which he said would draw more investors to the CSX during its early growth stage.
“The discount approach has been used annually to encourage investors,” he said.
“When the fees are reduced, the brokerage fee is also lower so investors can make more profit, which stimulates their appetite to invest.”