The Stock Exchange of Thailand (SET) has attached strong importance to and worked continuously to upgrade the governance standards in the Thai society. In line with this, and with the combined efforts and cooperation with regulatory agencies, listed companies, and other stakeholders, the corporate governance (CG) of the Thai Capital Market has been elevated significantly.
On February 27, 2017, the Federation of Thai Capital Market, 11 asset management firms, Anti-Corruption Organization of Thailand, KhonThai foundation, Thailand Development Research Institute (TDRI), and Change Venture have joined hands to launch the “Thai CG Fund”. This Thai CG Fund is an equity fund with a policy to invest in companies listed on SET and Market for Alternative Investment (mai) which have demonstrated good corporate governance. SET deems that this fund should encourage listed companies to pursue good corporate governance practice that includes transparency in business management and operations. Meanwhile, the CG Fund should also promote responsible investment by asset management firms, which together with good CG, will drive sustainable return on investment in the long run.
Initially, the stock universe of the CG Fund will consist of companies that have passed the screening by CG Scoring rank of the Thai Institute of Directors (IOD) and Collective Action Coalition of the Private Sector Against Corruption (CAC) companies. Each of 11 asset management companies could select any securities in the basket according to their investment policies and strategies. The list of the stock universe will be reviewed on a yearly basis and after Thai IOD announces its new securities list. Importantly, 40 percent of asset management fees from Thai CG Fund will also be pooled to support the efforts of organizations that promote good corporate governance and combat corruption.
The fund has a committee from asset management firms, with one member representing each firm. The committee will regulate and determine the stock universe to be used by all asset management firms. These CG companies in the list are companies awarded at least the four-star rating from Thai IOD (CGR), and must be a member of the CAC. The asset management companies can select any securities in the basket accordingly to their investment policies and strategies.
Currently, there are 17 Thai CG funds to invest as following:
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