Signing represents latest step towards establishment of exchange, say officials
THE Council of Ministers approved on Friday the draft of a subdecree detailing stock exchange regulations that officials described as necessary for establishing the exchange by the end of the year.
The subdecree was drafted by the Ministry of Economy and Finance in accordance with the Law on the Issuance and Trading of Non-Government Securities, which was passed by the National Assembly in October 2007.
The objective of that law, according to the website of the Securities and Exchange Commission of Cambodia (SECC), is to outline regulations for the exchange as well as for "operators in the securities markets who trade or provide financial services", including "public limited companies or registered legal entities that issue securities".
The subdecree details procedures related to the management and control of securities in Cambodia in line with the International Organisation of Securities Commissions, an organisation of securities and futures markets regulators, according to a Council of Ministers press release issued Friday. The release states that the procedures are designed to ensure that the exchange operates "fairly, effectively, transparently and orderly".
SECC Director General Ming Bankosal said the approval of the subdecree would allow for the implementation of the October 2007 law.
"Only with this subdecree can we issue regulations to control this sector," he said Sunday. "The subdecree will allow the SECC to authorise the establishment of the stock exchange and the listing of companies on the stock exchange. If there is no subdecree, everything will be bogged down and would not go forward."
A bond market will do a lot to help
companies to raise capital.
"Now that the subdecree has been approved, the SECC will prepare regulations such as a relevant prakas to inform companies about requirements to list on the stock market," he said.
The project director for the Korea Exchange (KRX) in Phnom Penh - the organisation working with the Cambodian government to establish Cambodia's exchange - said that the subdecree was an important step towards implementing the initiative, which was scheduled to be launched by the end of the year.
"This is critical for Cambodia's financial markets ... a bond market will do a lot to help companies to raise capital," said Inpyo Lee. He added that state-owned enterprises are hoping to float bonds on the new market.
The SECC, to be chaired by Minister of Finance Keat Chhon, is scheduled to launch officially on April 29.
ADDITIONAL REPORTING BY GEORGE MCLEOD