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New financial legislation

Several new bills concerning the banking and insurance sectors have been approved by the National Legislative Assembly, and should be published and come into force in due course. This summary has been drafted on the assumption that the bills are published and become acts.

1. Financial Institutions Business Act
This Act was drafted to strengthen the regulatory powers of the Bank of Thailand (BoT), to expand its supervisory powers to include specialised financial institutions, and to repeal existing laws. The Act was approved by a joint committee of the Senate and House of Representatives (HoR) in 2002, but was not subsequently approved during the term of the Senate and HoR.

This Act will come into force 180 days from the date of its publication, and will supersede the Commercial Banking Act and the Act on Finance, Securities and Credit Foncier Business. It will govern commercial banks, finance companies, credit foncier companies and branches of financial institutions, and business of specialised financial institutions.

Licensed commercial banks, finance companies and credit foncier companies are deemed financial institutions that have licences under the new Act. All ministerial regulations and notifications of the Ministry of Finance (MoF), and notifications of the BoT remain in force. All relaxations granted for shareholdings in excess of prescribed ratios will continue for a period not exceeding five years. The durations of other relaxations granted under various provisions are prescribed.

2. Amendments to Life Insurance Act and Insurance against Loss Act
The amendments increase the ceiling on foreign shareholdings from 25% to 49%, upon approval of the Committee.

3. Trust for transactions in Capital Market
This Act provides for the establishment of trusts for capital market transactions.

4. Deposit Protection Institution Act
This Act provides protection for depositors in bank accounts up to ceiling specified in the Act.

Update on lawsuit against the Petroleum Authority of Thailand (PTT): the Supreme Administrative Court has said it will announce its decision on December 14 2007.

Update on award of new IPPs: On December 7 2007, the Ministry of Energy announced four Stage 3 bidders to finalize power purchase agreements with Electricity Generating Authority of Thailand (EGAT):

Checo-One (Glow energy) coal-fired660MW
Siam Energy (J-power)1600MW
Power Generation Supply (J-Power)1600MW
National Power Supply (Advance Agro) coal-fired540MW

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