Bangkok--9 Jul--SET The Stock Exchange of Thailand (SET) has given an assurance that all systems and processes will be in place for the introduction of equity exchange-traded funds (ETFs) in Q3/2007. The new product should become popular very quickly as it can be easily traded like ordinary shares, has a market maker and can be sold short. SET and One Asset Management and its consortium have are ready to go, SET Senior Executive Vice President Mr. Supakit Jirapraditkul said. “Equity ETFs are well-accepted globally and especially in Asian markets such as South Korea, Taiwan, Singapore and China. Since 2003, the product’s compound growth rate in global markets has been about 70% annually. “In line with the Exchange’s three-year strategic plan supporting product diversity, ETFs bring another investment alternative and enhance the attractiveness of the Thai market,” Mr. Supakit added. Analysis of ETF implementation in international markets and feedback from fund managers experienced in establishing and managing the product indicate that the preconditions for its success are market education, work systems development and regulatory revision. SET has assessed investors’ educational needs as part of its product promotion, and is well aware that ongoing education is essential with an innovation such as this one. Since June 2007, Thailand Securities Institute (TSI) has conducted more than 15 workshops for brokerage firms’ marketing representatives, investors and members of the press. In regard to the second precondition for success, work systems development, SET has prepared and tested its trading and information dissemination systems, while Thailand Securities Depository has adapted its depository, clearing and registration systems to handle ETFs. Coordination and joint testing with SET member companies has ensured that all systems are prepared and effective. Concerning regulatory revision, changes to regulations have been approved by the Securities and Exchange Commission. An ETF will be traded under the ‘Unit Trust’ group, and its price spread will be THB 0.01. Ceiling and floor prices will be 30% of the previous day’s close. Asset management firms issuing an ETF must ensure there is at least one market maker providing liquidity for the duration of the listing. To facilitate arbitrage activity of participating dealers (PDs) and brokers, thus bringing the ETF market price nearer to its indicative value, short-selling will be allowed, with no restriction on prices or time. Nevertheless, before selling short, PDs or brokers must have the equivalent value of the securities group being traded and comply with SET regulations concerning short-selling. PDs are permitted to send in basket orders at any time, with no requirement on minimum value per basket. PDs and market makers will also be able to send orders through program trading to provide liquidity efficiently and manage ETF trading. Equity ETFs have become popular in other markets because it combines the features of securities with those of stocks and index funds. Trading is convenient like stocks, while the basket mechanism is similar to that in index funds trading. The product will diversify risk, and investing will cost only 0.10% of trading value. Obviously, it also provides another business opportunity for securities firms. For more information, please contact the Corporate Communications Dept.: Ladawan Kantawong Tel: 0-2229-2036 / Sarinluck Jitkawong Tel: 0-2229-2037 / Nattaporn Boonprapa Tel: 0-2229-2049 / Watsamon Saowakhonsathien Tel: 0-2229-2797