The laws and regulations that govern
Cambodia’s securities market were derived from the Objectives and Principles of
the International Organization for Securities Commissions (IOSCO) and the best
practices in the region, according to Dr. Ming Bankosal, Director General of
the SECC.
Dr.
Bankosal said The development for the last several years under the government
with the leadership of Samdech Decho Prime Minister Hun Sen, and with support
from development partners in particular the Asian Development Bank, the SECC
which is the regulatory body that
governs the Cambodia Securities Exchange (CSX) has been established and
licenses the securities firms to operate as underwriters, dealers, brokers and
investment advisors that act as intermediaries with the public to carry out buy
and sell orders for stock transactions. The SECC was established in 2008.
“Our
authority is that of a government body which has the power to regulate the
securities market,” he said.
The
SECC is governed, in turn, by a Commission chaired by the Deputy Prime Minister
Keat Chhon, Minister of Economy and Finance and includes representatives from
the Ministry of Economy and Finance Dr. Aun Porn Moniroth, the National Bank of
Cambodia, the Council of Ministers, the Ministry of Commerce, the Ministry of
Justice, the Director General of The SECC and two private sector
representatives, Dr. Ghanty Sam and Dr. Sam Sok Khon.
According
to the law “The Minister of Economy and Finance is automatically the chairman
and the members have a five-year
mandate,” Dr. Bankosal said.
The
SECC is the governing body that regulates, by law, the CSX.
“The
SECC grants the approval to the CSX to operate as the clearing and settlement
operator, the market operator and the depository operator,” Dr. Bankosal said.
“It has been a lot of work over the last few years and we are now implementing
those regulations“
Dr.
Bankosal says the stock market business is international business, and while
there are differences from one country to the other, the principles are the
same.
The
“book building” process has been undertaken by Tongyang Securities in their
role as underwriter for the Cambodia’s first IPO, the Phnom Penh Water Supply
Authority (PPWSA).
“Book
building is a securities term that for the SECC means, the SECC approves in
principle the disclosure documents of
the issuer. The issuer and underwriter will conduct the book-building with
disclosure documents which contain the price range of the shares. The investors
who participate in the book building will put a single price within the price range
with the quantity of securities that they wish to buy. The book-building
process allows issuer to determine the price of the share through the market
mechanism,” Dr Bankosal said.
“When
the book building is finished, the offering price is determined then the
disclosure document can be officially registered at the SECC and then the
subscription can start.”
Seventy
per cent of the shares are offered for
investors who successfully participate in the book building and thirty
per cent remaining are reserved for the unsuccessful investors who participated
in the book building, and investors who did not participate in the
book-building.
Dr.
Bankosal stated that the approved disclosure document from SECC does not mean
the SECC recommends the public to buy that share, so “investing is up to the
investor’s decision and SECC recommends
investors to read the disclosure document that gets approval from the
SECC before making any decision. If investors feel it is good to invest in the
company, do so; if not, don’t do it.”
Dr.
Bankosal said it is important for the Cambodian public to understand what a
stock market is.
“People
who would like to participate in the securities market need to get an investor
ID from SECC. For your investor ID, you can apply directly to the SECC or you
can go to a securities firm,” Dr. Bankosal said.
Once
the IPO process meets all the SECC requirements and subscription goes
forward, then trading can begin.
Dr.
Bankosal says the trading is in Riel as part of Cambodia’s strategy to promote
the use of the currency. But the investors still have option to settle in US
dollars but it is up to the agreement of the buyer and seller of securities.
“Sometimes
the public comments are very sharp but it is good medicine for us. The comments from the public are very, very
important. Without the comments and
participation from the public we cannot develop the market properly.
“We
know securities firms have invested a lot of money to support and develop the
market and we appreciate and we try our best, with the chairmanship of Deputy
Prime Minister Keat Chhon and under the
guidance of Dr. Aun Porn Moniroth, the SECC,
private companies and public all joining hands to develop the market
successfully.”
Dr.
Bankosal says the SECC appreciates the investments and hard work of the
securities firms, the state-owned enterprises, related parties and private
companies preparing for IPO, and listing on the CSX.
“These
professionals have supported the SECC since the beginning and without their
support the market will not be realized.”
He also
appreciates and acts on, comments from the public he gets from the SECC’s
website, which is in both English and Khmer. You can provide anonymous comments.
The
website is: http://www.secc.gov.kh/
The
Phnom Penh Post
Business & Investment Opportunities
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