Pichit says firm may bid for advisory licence
MFC Asset Management said it was considering applying for an advisory licence, after the Securities and Exchange Commission (SEC) announced a plan to liberalise the securities business in the next five years.
MFC president Pichit Akrathit said the firm had a team to serve this business, as it had been a financial adviser to many of the previous government's projects. Although currently the SEC allows asset-management companies to play such a role, it is done under tight SEC restrictions. Current SEC regulations stipulate that securities firms are allowed to apply for four licences: brokerage, underwriting, trading and advisory. Brokerage houses can also provide services that asset-management firms currently provide. For instance, they can apply for a licence to operate an asset-management firm. However, asset-management firms are not allowed to offer services that overlap those provided by brokerage firms. Pichit said the liberalisation of the securities and asset-management businesses in the next five years would be good for the industry in terms of competitiveness. However, if the regulator does not relax some of the rules, all competition will come down to a price war. "The liberalisation should be applied to product innovation. Also, the SEC should allow the players to conduct business in new market. If only the licence is liberalised, it's possible the players would compete in price rather than anything else," Pichit said. "In that scenario, it's possible that players would be forced to merge, because the competition would be forced to focus on price only." "I understand the SEC's intention is to control risk. However, control should be in such a way that the market can be developed," Pichit added. Pichit said being granted an advisory licence would be a path for the company to build up and run a private equity fund, which invests in non-listed companies. Also, an advisory licence would allow MFC to be an operator for property funds. Currently, mutual-fund firms can act as a financial manager for property funds, but it must hire another party to manage the underlying assets. Pichit said MFC had talked to some securities firms about the possibility of becoming a strategic partner. However, he said MFC's priority was to obtain an advisory licence. MFC last year announced its plan to provide an advisory service by becoming a holding company, which would categorise its management in property, government projects and mutual funds. Piyarat Setthasiriphaiboon The Nation
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