SEC requires securities companies to be cautious when giving trading advice to clients

Bangkok, March 27, 2013 – The SEC has reiterated securities companies to instruct investment consultants to give securities trading advice based primarily on fundamental factors of securities, particularly during the current escalating trading of securities with
a high P/E ratio and under cash balance rule.

SEC Secretary-General Vorapol Socatiyanurak said: “The SEC has urged securities companies to carefully supervise their investment consultants to provide investment advice to their clients based on securities’ fundamental factors. The investment consultants are also required to remind investors to take precaution in trading securities with a high Price to Earnings (P/E) ratio or securities under cash balance rule, as well as to provide relevant risk information. If any securities companies fail to strictly monitor and supervise their investment consultants to follow such requirements, the SEC may consider that they have inefficient compliance systems and may pursue further actions.”

The trading volume of securities with a high P/E ratio and those under cash balance rule have increased rapidly over the past few months, due mainly to demand of domestic investors and the number of new retail investors. In this regard, the SEC has urged all investors to be more cautious in their securities trading and consider fundamental information sufficiently before making an investment decision. This will help to prevent damage to investors and their confidence in the capital market.