Applying and granting a license to conduct Futures Broker business in Thailand

Transcription

1 Applying and granting a license to conduct Futures Broker business in Thailand The Office of the Agricultural Futures Trading Commission (Regulator of Agricultural Futures Trading) February 2014

2 1. Regulatory Background o The Agricultural Futures Trading Commission (AFTC) was established with the mission to regulate, supervise and develop the agricultural futures trading in Thailand. o The Agricultural Futures Exchange of Thailand (AFET) is the only exchange to trade agricultural futures in Thailand o Clearing House is an in-house unit in the exchange

3 1. Regulatory Background Regulatory structure Agricultural Futures Trading Commission (AFTC) supervises Agricultural Futures Exchange of Thailand (AFET) supervises supervises Exchange member Futures Broker Futures Trader Futures Agent Futures Supporting Agent Futures Trading Advisor Futures Trading Manager Futures Pool Business Operator 3

4 2. How to Start Futures Broker Business? Applying for Futures Broker license with AFTC Applying for AFET membership within 90 days after receiving a license from AFTC Applying for a Clearing House membership 4

5 3. Qualification of Futures Broker 3.1 Qualification of License Applicant Objective... o Having an objective to engage in futures trading business in category of futures broker under the Act * Clean record... o Has no person with power to manage business, that possesses a disqualification under Notification of AFTC # Gor Thor 1/2553 Readiness... o Have no less than 1 employee underwent a Futures Trading Training at an institute recognized by AFTC o Possesses work system and readiness for futures trading business such as conflict of interest prevention system, risk management system, i.e. *Applicant shall received a written authorization from AFTC prior to amend business objective with Department of Business Development 5

6 3. Qualification of Futures Broker 3.2 Additional work systems for the applicants already engaged in other businesses o Has Risk Management System, that will not constitute a reasonable effect on the futures trading business o Has a system to reasonably prevent conflicts of interest with futures trading business o Conduct businesses related to, or connected with any futures trading business that enhances completeness and integrity of services, or is a mean to better manage human resources, premises, equipment, or accessories. 6

7 4. Futures Broker Applying Guideline 4.1 Applying and Licensing Procedure - Licensing No License Applicant AFTC Sufficient doc? Application+ Documents Yes Pass through AFTC reviews documents AFTC issues License (within 5 days after notification) AFTC notifies a result (within 30 days after received application and completed documents) 7

8 4. Futures Broker Applying Guideline 4.2 Applying and Licensing Procedure Readiness Check Point AFTC issues License (within 5 days after notification) Applicant setting up system and prepare to launch business* Passing readiness check from AFET and Clearing House* * within 90 days after receive license. Prior to exceeding 90 days, license holder may request for 90 days extension if necessary. Commence Business 8

9 Example Administrative and Operation Plan in respect of work system and readiness for launching business Business nature at present, and reason to engage futures trading business Sources of fund for business operation Policy, target, futures work plan, and target customer Organization chart, duties and responsibilities of various work units related to futures broker business 9

10 Example Work Systems 1. Measure to prevent conflict of interest 2. Risk management 3. Internal control and compliance 4. Documenting, proofing identity of clients, and opening trading accounts 5. Accepting and sending trade orders, as well as giving clients advice 6. Maintaining financial status 7. Monitoring of client asset 8. Accounting and financial Reporting 9. Handling customer complaints 10. Record keeping 10

11 5. Applying and Issuing a License Expense 5.1 License Related Expense Fee THB o Submission Application Fee THB 50,000 o License Granting Fee THB 150,000 o Annual Fee for License THB 50, Training and registration expense for employees of license holder Training Expense Assessment Expense Registration 1,000 11

12 6. Conducting Business as Futures Broker 6.1 Personnel Executive Do not possesses a disqualification under Notification of AFTC # Gor Thor 1/2553, and shall be approved by Secretary General Employee Has no less than 5 employees underwent a futures training at an institute recognized by AFTC 1) Marketing Officer 2) Analyst having qualifications duties, and responsibilities as required and registered with AFTC 3) Compliance Officer 12

13 6. Conducting Business as Futures Broker 6.2 Financial Requirement Registered Capital of at least THB 50 Million Paid-up Capital of at least THB 50 Million Adjusted Net Capital of at least THB 10.5 Million Adjusted Net Capital of at least 12% of risk margin 13

14 6. Conducting Business as Futures Broker 6.3 Reporting Information reporting Time Line Due Date o Statement of Financial Position as of month end o Financial Statement as of month end o Report of Client Assets as of month end o Broker Transactions Report o Audited Financial Statement with Auditor s Report Monthly Monthly Every 6 month Annually Within 10th of following month Within 10 th of following month Within 3 months from the end of accounting period Within 21 days from the date of approval by the general meeting of the shareholders but not later than 4 months from the end of such financial year 14

15 6. Conducting Business as Futures Broker 6.3 Reporting (Continue) AFTC may require additional reports on weekly or daily basis depend upon price volatile and risk 15

16 HOW TO CONTACT AFTC? The Office of the Agricultural Futures Trading Commission Level 15, CRC Tower, All Seasons Place 87/2 Wireless Road, Lumpini, Patumwan, Bangkok Thailand Phone: (66) Ext. 600 Fax: (66)