Combining financial education and consumer protection to promote financial inclusion: global challenges and country practices Thailand’s Experience Securities and Exchange Commission of Thailand 16 December 2014 Tipsuda Thavaramara Deputy Secretary-General
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Combining financial education and consumer
protection to promote financial inclusion:
global challenges and country practices
Thailand’s Experience
Securities and Exchange Commission of Thailand
16 December 2014
Tipsuda Thavaramara
Deputy Secretary-General
Overview: Challenges in Thailand
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฿-
฿5,000
฿10,000
฿15,000
฿20,000
฿25,000
2000 2002 2004 2006 2007 2009
Household Income, Expenditure, and Debt to income ratio
People need some risky products to generate growth
People should have
“Freedom of Choice”
& to reduce inequality
foreign equities high yield bonds
securitized products
REITs
ETFs
mutual funds
GMS-linked products
BUT must clearly understandrisks & accept consequences of their choices
Thailand is
currently ranked in unequal
distribution of wealth in the world.
6th
Source: Credit Suisse Global Wealth Report
Education is a tool
Before Current
what questions to ask
what they need to know
To inform investors:
key product specific risks
XSignature __________
WRONG ANSWER? Read the solution to learn more
Acknowledge specific risk 5
Investors
BUT!Notat theright
time mediumchannellanguage
InvestorsFinancial Services
By the time investors need
to make decisions
???
Example: Risk Warning for BASEL III Securities
I understand the characteristics, specific risks, and return related to Basel III securities. More specifically, I clearly understand that:
1. Basel III securities are riskier than general bonds.
2. Basel III securities do not have a liquid secondary market. Furthermore, the Bank of Thailand does not allow issuing bank to buy back the Basel III securities. Therefore, I acknowledge the difficulties of redeeming and reselling the product.
3. Issuing bank can impose special terms, such as restrictions on principle and interest payments. Since this is not considered as a default by the issuing bank, I will not have the right to take legal actions against the issuing bank.
4. I may be forced to convert my Basel III securities to equity at the price that may be higher than current market price, when issuing bank face financial difficulties.
5. I may lose all my investment and return in Basel III securities if the Bank of Thailand intervenes to rectify issuing bank’s financial difficulties
Signature ________________________
(investor)
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Going forward
Focus on
Behaviors & Biases
of investors
Sharpen our tools that equipped investors to make well-informed decision
Right amount of investor protection without hindering