Cambodia Debates Two Draft Regulations for Stock Exchange
Written by DAP-NEW -- Friday, 07 August 2009 02:43
The Securities and Exchange Commission of Cambodia (SECC) on Thursday put to public debate two draft Prakas (regulations). The first is the Grant of Approval to the Operator of a Securities Markets, the Operators of a Clearance and Settlement Facilities and the Operator of a Securities Depository, and the second the Licensing of Securities Firms and Securities Representatives. The two draft regulations will pave the way to the opening the SECC in the near future.
"The debate of two draft Prakas is aimed at receiving recommendations as well as inputs from the relevant public institutions, development partners and private sector to make these drafts conform to the economic and financial situation and the current context of the Cambodian economy, especially in regard to requirements on capital, risk management, and IT system before these Prakas are approved to become effective," Dr. Aun Porn Moniroth, secretary of state for Ministry of Economy and Finance (MEF) said at the opening the Public Consultation Meeting in Phnom Penh.
"SECC has prepared many draft Prakas for the stock exchange to process smoothly and before it comes into full operation," said Dr. Aun Porn Moniroth, also a delegate minister attached to the prime minister. He stressed that to ensure the stock market operates effectively, primary actors such securities market operators, securities firms, securities representatives, listed companies, individual and institutional investors, along with other market participants, must be in existence.
While establishing the securities market, the Government has also considered the soundness of the whole market operations, which emphasizes corporate governance development, he stressed. This will lead to development and improvement of the corporate governance of the private sector, he said, adding that the Government established the sub-committee on corporate governance development under the private sector development committee. This body is tasked with developing the legal framework and promoting corporate governance, especially of stock market listed companies and market participants, including securities operators and securities firms.
"The experience of financial crises tells us that the reasons for such events are due to weak governance. Therefore I urge all the members of the debate to closely watch the corporate governance of securities market operators and securities firms," the minister said.
Securities markets will provide the mechanism of mobilization for all kinds of financial resources to finance the company's investment projects, he continued. Financing obtained through securities markets is long term financing, which promotes diversification of the sources of Cambodian economic growth, helping it become a sustained and broad-based economy.
From this perspective, the minister said, the Cambodian Government decided to establish the local securities market. The existence of securities markets will promote accountability, transparency and good corporate governance, as well as efficiency in companies' business operations, especially those companies listed on stock markets.
According to the Prakas, companies to be listed on the local bourse need approval from the SECC. The SECC "shall grant the approval or notify refusal decision of the SECC of the applicant … [and] the validity pf the first approval is for a duration of eight years and operators shall apply for the renewal of approval within the last 12 months of the validity of the approval in accordance with the requirements determined by this Prakas."
"The validity of the renewal of the approval shall be for a duration of eight years or for an indefinite duration," it added. Application fees and the document processing costs US$2,500 with fees will non-refundable in case of refusal of the application. Annual fees are set at US$5,000 for each operator, the Prakas stipulates. The transitional fine for the late payment of approval annual fees is US$250 per day. If an applicant fulfills all the requirements, the SECC "shall make decision on the application nit later than six months from the date of the lodgment of the application."
The securities and exchange commission of Cambodia (SECC) is the regulator supervising, controlling and developing the securities sector has been preparing regulations and supervision mechanisms. The SECC has vowed to ensure "transparency, efficiency and soundness" in the markets' operation.