Sethaput Suthiwart-Narueput, senior vice president of the SET's Research and Information Division, said yesterday that the five proposals had come from asset-management companies that are individually matched with five securities firms.

Sethaput said each team's qualifications would be considered, including their relationships with institutional and retail investors, strategies and marketing plans, capability to retain liquidity in an ETF, investment strategies, capital bases and growth prospects, fees and potential to launch the fund as scheduled.

"The SET will announce the equity ETF's team in the third week of this month. Then the related systems will be set up. The selected team will work with the SET to promote the fund and educate investors and parties involved, so that the fund can be launched in the second quarter as planned," he said.

The equity ETF will track either the SET 50 Index or an index proposed by the consortium and approved by the SET. It will have at least one market maker, and the value of its initial public offering (IPO) must be more than Bt300 million. The SET will inject Bt100 million to boost sentiment, and it will gradually sell its units in the ETF six months after the IPO.

An ETF is an open-ended fund that tracks specific indexes and can be traded like securities. It will involve mainly five parties: the SET, a fund manager, a trustee, an index vendor and a participating dealer.

An asset-management company joins forces with a securities firm - which will act as a participating dealer - to set up an ETF. Only the participating dealer can create or redeem a unit trust.

The tracked stocks selected to create the ETF will be weighted in accordance with the analysis of the fund manager. Investors will trade them via brokerage firms.

Siriporn Chanjindamanee

The Nation