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									                                     (Translation)


Readers should be aware that only the original Thai text has legal force and that
this English translation is strictly for reference. The SEC, Thailand cannot
undertake any responsibility for its accuracy, nor be held liable for any loss or
damages arising from or related to its use.
                              -------------------------------

            Notification of the Securities and Exchange Commission
                               No. KorYor. 50/2547
              Re: Rules for Undertaking of Derivatives Exchange
                         and Derivatives Clearing House


              By virtue of Section 9, Section 55, Section 73, Section 76, the third
paragraph of Section 82 and the first paragraph of Section 89 along with Section
73, of the Derivatives Act, B.E. 2546 (2003), the Securities and Exchange
Commission hereby issues the following regulations:

                Clause 1. In this Notification:
                “derivatives exchange” means an entity licensed to undertake
derivatives exchange;
                “derivatives clearing house” means an entity licensed to undertake
derivatives clearing house;
                “beneficiary from derivatives trading of customer” means;
                (1) a beneficiary or co-beneficiary from derivatives trading of
customer;
                (b) a controller of derivatives trading of customer; or
                (c) a person who provide financial assistance to customer for the
purpose of trading or performing of obligation related to, or connected with,
derivatives trading of customer;
                However, irrespective of whether such acceptance of benefit,
control or provide financial assistance has occurred from any agreement,
understanding, connection or other means;
                “parent company” means;
                (1) a juristic person holding shares in the clearing house for not less
than fifty percent of the sold shares;
                (2) a juristic person holding shares in the juristic person under (1)
for not less than fifty percent of the sold shares of such juristic person;
                “executives” means a director, executive director, manager, deputy
manager, assistant manager, department director or any person holding equivalent
position called otherwise, including a person contracted to have fully or partly
authority in management;
                “Stock Exchange” means the Stock Exchange of Thailand under the
law on securities and exchange;
                “securities trading center” means the securities trading center under
the law on securities and exchange;
                                    (Translation)
                                         -2-
               “securities clearing house” means the clearing house under the law
on securities and exchange;
               “SEC Office” means the Office of the Securities and Exchange
Commission.

            Clause 2.       This notification shall come into force as from 16
October 2004.



                                CHAPTER I
                Rules for Undertaking of Derivatives Exchange


               Clause 3. The derivatives exchange shall have sufficient venue for
capital raising for supporting its undertaking and recovering risks which may
occur from its business. The venue for capital raising for recovering risks shall be
able to be paid for recovering those risks instantly.

               Clause 4. The derivatives exchange shall have the system for the
performance of obligation under the derivatives contract by the derivatives
clearing house carried out by the derivatives exchange itself or other persons. In
this regards, the derivatives exchange shall guarantee the performance of
obligation under the derivatives contract abruptly when the trading is made, and
the guarantee shall be terminated when the derivatives clearing house is bound or
being a party to the contract with the purchaser and seller of the derivatives. In
this case, the derivatives exchange shall notify information related to the
derivatives to the derivatives clearing house without delay after such trading.

               Clause 5. The derivatives exchange shall provide sufficient
measures for enhancing and maintaining security, trust and fair standard for
derivatives trading as follows:
               (1) the derivatives trading system which is able to support expected
trading volume and such system may be expanded so as to support an increasing
trading volume. In this regards, the rules and practices for sequencing and
matching trading order shall be disclosed;
               (2) the recording system for information related to the derivatives
trading which includes pre-trade information and post-trade information for the
purpose of audit trail. Such information shall be kept for not less than ten years as
from the recording date, except otherwise order by the SEC Office;
               (3) the efficient surveillance system consisting of, at least, the
followings;
                       (a) having system for recording unique identification of the
customers and the beneficiaries from derivatives trading of customers correctly
upon real time. Such information may be recorded by citizen identification,
juristic register number or other number as determined by the derivatives
exchange;
                                    (Translation)
                                         -3-
                       (b) having system for analyze derivatives position of each
member and customer for monitoring derivatives position of such person;
                       (c) having monitoring and reporting system on derivatives
position of a member or customer which his or her derivatives position become the
large trader level as determined by the derivatives exchange, including the
changing of derivatives position of such person;
                       (d) having monitoring and examining real time conditions of
derivatives trading;
                       (e) maintaining system for an implementation made under
(b)-(d) for not less than three years as from the implementation date, except where
the SEC Office ordered otherwise.

                Clause 6. The derivatives exchange shall provide sufficient
measures for protecting and deterring unfair and abuse derivatives trading at least
as follows:
                (1) having rules which empowers the derivative exchange to carry
out derivatives trading for members and customers as follows:
                       (a) suspend derivatives trading, except trading done for
closing out derivatives positions;
                       (b) close out derivatives position;
                       (c) limit derivatives position;
                       (d) limit trading volume of derivatives position;
                (2) having determination that requires members to provide the letter
of consent of their customers which appoint the members as their derivatives
brokers whereby the customers agree to notify and provide information which is
necessary for unique identification of customers and beneficiaries from derivatives
trading to members and give consent to members to send those information to the
derivatives exchange and the SEC Office as well as giving consent to member to
suspend its derivatives trading service temporarily, to close its derivatives account,
to limit its derivatives position or derivatives trading volume and to close out its
derivatives position in accordance with the order of the derivatives exchange;
                (3) having rules allowing derivatives exchange to interchange
information on derivatives trading, members, wrongdoing and penalty of member,
including other information received on account of being derivatives exchange
with the derivatives clearing house, Stock Exchange, securities trading center,
securities clearing house, the SEC Office and the Bank of Thailand.

              Clause 7. The derivatives exchange shall have efficient record
system and dissemination of information related to price offering and trading of
derivatives which at least having information of each contract as follows:
              (1) derivatives price offering and trading volume;
              (2) actual derivatives trading price;
              (3) derivatives trading volume;
              (4) open interest of derivatives;
              (5) other information as specified by the SEC Office.
                                            (Translation)
                                                 -4-
               Clause 8. The derivatives exchange shall provide contingency plan
so as to recover emergency situation which may affect the derivatives trading or
the performance of obligation under the derivatives contract. The emergency
situation shall cover any situation which may occur and shall clearly determine
steps of work and responsible person for each step of work.

              Clause 9. The derivatives exchange shall provide efficient
management system related to any complain or dispute incurred from derivatives
trading in the derivatives exchange or from services provided by the derivatives
exchange.

                Clause 10. The derivatives exchange shall have transparent and fair
criteria in accepting member. In specifying such criteria, the appropriate, financial
status, result of operation, readiness, capability and ethics for business undertaking
of the person who will be member shall be taken into account.

                Clause 11. The derivatives exchange shall have rules enforcing its
members and members’ staff to act in accordance with rules and ethics of
derivatives business undertaking, and having measures to be imposed to a person
who violates or fails to comply with the rules or ethics. In this regards, the
derivatives exchange shall evaluate an implementation under the rules and ethics
of such person during appropriate period of time, and shall prepare and submit to
the SEC Office a report on evaluation and action taken towards a person who
violates or fails to comply with such rules or ethics.
.

             Clause 12. The derivatives exchange shall submit report or
document at specific period of time, or from time to time, as determined by the
SEC Office.

                Clause 13. The derivatives exchange shall have measures to
prevent its staff or executive to earn illegal benefit from information received from
the performance of their duties and shall have measures to keep member’s and
customer’s confidential information, except the implementation under the scope of
this Notification or the implementation empowered by the laws.

               Clause 13/1.1 In order to protect public benefit or investors, the
derivatives exchange shall adequately disclose information related to derivatives
trading, members, commit an offence and penalty of member, including other
information received on account of being derivatives exchange which such
information is necessary for the making decision of investors in derivatives trading
or making transaction with members. Such disclosure shall be made instantly and
investors shall have chance to receive such information equally. The category of
information, procedures and conditions of such information disclosure shall be in
accordance with the determination of the derivatives exchange, with an approval
of the Securities and Exchange Commission.
1
As added by the Notification of the Securities and Exchange Commission No. KorThor.51/2548 Re: Rules for
Undertaking of Derivatives Exchange and Derivatives Clearing House (No. 2) dated 28 October 2005.
                                            (Translation)
                                                 -5-
                  2
               If the fact and situation have changed, the SEC shall have the
power to order the derivatives exchange to amend types of information,
procedures and conditions of such information disclosure as approved by the
Securities and Exchange Commission, and shall have the power to order the
derivatives exchange to do any act as the Securities and Exchange Commission
may deem appropriate.

                                   CHAPTER II
                  Rules for Undertaking Derivatives Clearing House


                Clause 14. The derivatives clearing house shall have the source of
fund supporting its undertaking and recovering risks which may occur from its
business operation for not less than five hundred million Baht. Such fund may
compose of shareholders’ equity of the derivatives clearing house, assets
maintained by the derivatives clearing house for the security of trading system and
the performance of obligation in derivatives exchange or written binding of the
parent company which is enforceable under the law. In providing financial
support to the derivatives clearing house, the parent company shall reserve liquid
assets with low risks as explicit guarantee for such binding.
                For the benefit of consideration on the sufficiency of the source of
fund under the first paragraph, the derivatives clearing house shall evaluate stress
test for at least every quarter and submit the report on such evaluation to the SEC
Office.

               Clause 15. In providing the performance of obligation service
under the derivatives contract, the derivatives clearing house shall have the system
which is capable to ensure the performance of obligation under the derivatives
contract. In this case, the derivatives clearing house shall be bound or being a
party to the contract with the purchaser and seller of the derivatives abruptly when
the derivatives exchange has notified trading information to the derivatives
clearing house, and shall establish the explicit measure to cope with default in the
derivatives contract.

               Clause 16. The derivatives clearing house shall provide effective
management and monitoring measures for counter-party risks which may incur
from the derivatives. Such measures shall, at least, compose of the followings:
               (1) having a system for pledging or requesting collateral as security
for the derivatives. Such system shall meet with international standard and the
value of the collateral to be maintained daily shall be calculated upon the
fluctuation of price and derivatives position of a member and customer (volatility
based margining). A member is required to deposit collateral in advance for
supporting loss which may incur from derivatives position, and the derivatives
position of a member or customer or that of different customers shall not be taken
for gross margining. In case where the derivatives price is highly fluctuated the

2
 As added by the Notification of the Securities and Exchange Commission No. KorThor.51/2548 Re: Rules for
Undertaking of Derivatives Exchange and Derivatives Clearing House (No. 2) dated 28 October 2005.
                                    (Translation)
                                         -6-
derivatives clearing house shall manage to have prepare intra-day margining
system and shall adjust the value of deposited collateral daily (daily mark-to-
market). In addition, the calculation and claim for loss incurred from derivatives
position from member shall be made daily so as to protect retained loss;
               (2) having determination that a member must call for collateral from
its customer for not less than the amount that derivatives clearing house call from
its member;
               (3) determinating member to deposit collateral for derivatives
trading in form of cash, government bond, treasury bill or other properties as
notified by the SEC Office;
               (4) arranging to have risks management committee having duties in
determining risks management policy and monitoring an implementation
according to such policy. A member of such committee shall consist of a person
having knowledge or experience in derivatives contract, risks management or
management of the derivatives clearing house or securities clearing house.

                Clause 17. The derivatives clearing house shall have transparent
and fair criteria in accepting member. In specifying such criteria, the appropriate,
financial status and risk management system of the person who will be member
shall be taken into account.

                Clause 18. The derivatives clearing house shall have rules
enforcing its members, having measures to monitor its members to act in
accordance with such rules, and having measures to be imposed to a member who
violates or fails to comply with the rules. In this regards, the derivatives clearing
house shall evaluate an implementation under the rules of its members during
appropriate period of time, and shall prepare and submit to the SEC Office a report
on evaluation and action taken towards a member who violates or fails to comply
with the rules.

               Clause 19. The derivatives clearing house shall have surveillance
system on financial status and derivatives position of its members and customers
which at least compose of the followings:
               (1) having evaluating and monitoring financial status, financial
stability and risks management system of its members regularly, and shall have
measure to ensure that financial status and risks management system of its
members are in accordance with the rules of the derivatives clearing house;
               (2) keeping information related to derivatives position of each
member and customer for not less than ten years as from the date of receipt of
such information, except otherwise order by the SEC Office;
               (3) having rules for derivatives clearing house relating to the
exchange of derivatives position information with the derivatives exchange, the
Stock Exchange, securities trading center, securities clearing house, the SEC
Office and the Bank of Thailand.
                                            (Translation)
                                                 -7-
              Clause 20.3 The provisions of Clause 8, Clause 12, Clause 13 and
Clause 13/1 shall apply to the derivatives clearing house mutatis mutandis.


                                 Notified this 11th Day of October 2004.

                                          Somkid Jatusripitak
                                        (Mr. Somkid Jatusripitak)
                                           Minister of Finance
                           Chairman of the Securities and Exchange Commission



Notes:
      The Notification of the Securities and Exchange Commission No. KorYor.
50/2547 Re: Rules for Undertaking of Derivatives Exchange and Derivatives Clearing
House dated 11 October 2004, published in the Government Gazette on………
       The Notification of the Securities and Exchange Commission No.
KorThor.51/2548 Re: Rules for Undertaking of Derivatives Exchange and Derivatives
Clearing House (No. 2) dated 28 October 2005, published in the Government Gazette
dated 16 December 2005, Vol. 122, Special section 144Ngor.




3
As amended by the Notification of the Securities and Exchange Commission No. KorThor.51/2548 Re: Rules for
Undertaking of Derivatives Exchange and Derivatives Clearing House (No. 2) dated 28 October 2005.

								
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