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MINISTERIAL REGULATION
Establishing Rules and Procedure for the Fund
Management of
the Government Pension Fund
B.E.2546
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By virtue of Section 4, Section
69 paragraph three and Section 70 of the Government
Pension Fund Act B.E.2539, the Minister of Finance
issues a ministerial regulation as follows:
Clause 1. There shall be repealed—
(1) Ministerial Regulation No.4 (B.E.2540) issued
under the Government Pension Fund Act B.E.2539
(2) Ministerial Regulation No.5 (B.E.2543) issued
under the Government Pension Fund Act B.E.2539.
Clause 2. In this Ministerial Regulation,—
“financial institution” means a financial institution
licensed to manage provident funds under the law governing
provident funds or licensed to manage private funds
under the law governing securities and exchange
“state enterprise established by special law” means
a state enterprise established by an Act or an Annoucement
of the National Executive Council
“bank” means a commercial bank or a bank established
by special law which carries on business within the
kingdom
“debt instrument” means a bond, bill of exchange,
promissory note, debenture or any other instrument
of similar description
“fund management company” means a financial institution
authorized to manage a fund
“sub-fund” means the fund which is segregated as a
small portion for a fund management company to manage
“finance company” means a finance company or finance
and securities company under the law governing the
undertaking of finance business, securities business
and credit foncier business
“unit trust” means an investment unit of a mutual
fund established under the law governing securities
and exchange
“securities” means assets and includes securities
under the law governing the undertaking of securities
business and securities exchange.
Clause 3. The fund shall be invested
in highly secure securities at not less than sixty
percent of the Net Asset Value and may not be invested
in the shares, debentures, convertible debentures
or share warrants issued by any company at more than
ten per cent of the Net Asset Value or at more than
such amount as may be specified by the Board.
The investment in the shares, convertible debentures
or share warrants under paragraph one shall in the
aggregate of those of all companies combined not exceed
twenty per cent of the Net Asset Value.
Clause 4. The Board may divide the
fund into sub-funds, each of which may be of any such
value as it may specify.
In managing the fund, the Board may have the GPF manage
it by itself or it may authorize any fund management
company to manage the fund of any one or several such
sub-funds.
Clause 5. In case the Board authorizes
a fund management company to manage the fund of a
sub-fund, that fund management company shall do so
in accordance with the following rules and procedure:
(1) That fund management company may not invest sub-fund
in the purchase of the shares, convertible debentures
or share warrants issued by that fund management company
(2) Must invest in or hold any one of the following
highly secure securities at not less than sixty per
cent of the fund’s Net Asset Value
(a) cash, bank deposit or negotiable certificate
of deposit issued by a bank
(b) government bond, treasury bill or Bank of Thailand
bond
(c) debt instrument issued by a state enterprise established
by special law
(d) debt instrument secured in terms of principal
and interest by the Ministry of Finance
(e) bill of exchange certified, endorsed or given
aval by a bank or promissory note without recourse
or given aval by a bank
(f) debt instrument issued by a bank
(g) promissory note or debt instrument issued, certified,
without recourse or given aval by the Industrial Finance
Corporation of Thailand
(h) debt instrument rated in the rating prescribed
by the Minister of Finance and published in the Government
Gazette or debt instrument issued, given aval or fully
secured in terms of principal and interest by a company
of which rating prescribed by the Minister of Finance
and published in the Government Gazette, at not more
than ten per cent of the fund’s Net Asset Value or
as specified by the Board
The credit rating referred to in (h) must be rated
by a credit rating institute approved by the Office
of the Securities and Exchange Commission or by a
foreign credit rating institute recognized by the
Office of the Securities and Exchange Commission.
(i) debt instrument, repayment of principal and payment
of interest on which are fully secured, of a company
or juristic person established under the law governing
special purpose vehicle (SPV) for securitization purpose
In cases where it deems appropriate, the Board may
prescribe for the investment in or the holding of
such securities in (a) to (i) at less than sixty per
cent of the fund of the sub-fund but, when added with
the portion managed by the GPF itself, the aggregate
must be not less than sixty per cent of the fund’s
Net Asset Value.
(3) That fund management company
may invest sub-fund in any one of the following securities
as may be specified by the Board:
(a) debt instrument issued by a state enterprise
under the law governing budgetary procedure other
than that in (2) (c), the small-scale industrial credit
insurance corporation, a small-scale industrial finance
corporation, a finance company or a credit foncier
company
(b) unit trust or investment unit warrant
(c) share or share warrant
(d) debenture or convertible debenture specified otherwise
(e) negotiable certificate of deposit issued by a
finance company
(f) bill of exchange unconditionally certified, endorsed
or given aval by a finance company or a credit foncier
company or promissory note endorsed or given aval
by a finance company or a credit foncier company
(g) debt instrument issued by the TFSC Company Limited
(h) immovable property at not more than five per cent
of the fund’s Net Asset Value, the Board may establish
any rules or conditions in relation thereto
(i) such other securities as may be prescribed by
the Minister of Finance and published in the Government
Gazette with or without any rules for observance
(4) That fund management company may
invest the sub-fund in the following business activities:
(a) involve in repurchase agreement or the
similar transactions may be specified by the Board
(b) borrowing or lending of the securities for which
the Bank of Thailand is securities registrar or the
securities processed through the securities depositary
system of a securities depositary centre under the
law on securities and exchange.
Repurchase agreement and the lending
of securities shall be done is such manner as prescribed
by the Board.
Clause 6. The management of the fund
by the GPF itself shall conform to the following:
(1) Investment in the kingdom shall conform to the rules
and procedure prescribed in Clause 5
(2) Investment in foreign countries shall not exceed
ten per cent of the fund’s Net Asset Value. In this
regard, the types of securities in which investment
may be made and the classification of highly secure
securities and other securities shall conform to the
rules and procedure established by the Board.
Clause 7. Evaluation of securities
for the purposes of Clause 3, Clause 4 and Clause 5
shall be made by reference to the investment cost inclusive
of the expenses incurred in the acquisition of such
securities, with the value of the securities to be adjusted
at least at the end of every accounting period of the
fund in accordance with the rules and procedure established
by the Board.
Clause 8. Purchase and sale of listed
securities under the law on securities and exchange,
other than those listed securities in Clause 5 (2) (b)
and (c), must be done in the Securities Exchange of
Thailand or in such manner as prescribed by the Board.
Clause 9. For he management of the
fund in the manner other than those mentioned in Clause
5, the Board may authorize the fund management company
to do the following:
(1) sell,exchange, sell with right to repurchase, mortgage,
reverse mortgage for the mortgagor or transfer mortgage
right in respect of an immovable property or movable
property that can be mortgaged
(2) create or liquidate in whole or in part the right
in respect of an immovable property under the Civil
and Commercial Code or under other laws
(3) dispose of or create an obligation for the disposal
of a claim intended to create or the transfer of the
right in a land or for the release of the land from
such right
(4) lease out an immovable property for a period of
more than three years or sub-lease an leasing right
of an immovable property
(5) sell or exchange a movable property with register
of ownership or document of title.
Clause 10. The reserve under Section
72 of the Government Pension Fund Act B.E.2539 shall
have investment priority in the debt instruments of
state agency or a state enterprise. If at any one time
there is no such debt instrument available for investment,
the Board may by notice prescribe for the investment
of such fund to be made in accordance with the rules
and procedure in Clause 5.
Clause 11. Where it appears that any
fund management company managed the sub-fund not in
accordance with the rules and procedure prescribed in
Clause 3 and Clause 5,that fund management company shall
rectify so as to comply with the said provisions without
delay, but not exceeding thirty days from the date of
non-compliance.
Clause 12. Expenses for the management
of a fund are stated as follows:
(1) Remuneration for the fund management company at
not exceeding 2.5 per cent per year of the Net Asset
Value of the sub-fund under the management of that fund
management company
(2) Fees and stamp duty incurred.
Clause 13. A fund management company
shall submit a monthly fund management report to the
Investment Committee within the 20th day of the month
for the month of which performance is reported, the
report shall be made in such form as prescribed by the
Investment Committee.
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