CAPITAL MARKET DEVELOPMENT FUND FOUNDATION
In the aftermath of the Thai stock market crash in1979,the government and the private sector joined hands to set up the Capital Market Development Fund (CDF).
CDF was the product of the initiative of the Ministry of Finance and the Bank of Thailand with financial institutions and other orgnisations related to capital market development participating in its inception.
The Capital Market Development Fund (CDF) was established on August 3, 1979. Its main objectives were twofold, namely stabilization of stock prices and restoration of investor confidence to encourage stock market investment. CDF was not aimed at profit making and it would not be used for market intervention when market liquidity was at normal levels.
CDF was supervised by the Fund Committee whose members represented the Fund participants and related agencies. Its roles were to set policies.advise, lay down Fund regulations.and supervise its administration. The management of CDF was entrusted to the industrial Finance Corporation of Thailand on the basis of its role as an autonomous and reputable financial institution and its objective in promoting capital market development.The Fund manager was responsible for the management of the Fund accordance with the objectives,policies, and regulations set by the Fund Committee.
CDF had an inception of Baht 1,000 million in the form of loans from participating institutions, namely, members of the Thai Bankers Association, The Government savings Bank, and the Bank of Thailand, in the proportion and under conditions agreed upon at the time of the Fund’s establishment.
CDF not only succeeded in its objective of helping the stock market through the difficult times,it also played an important role in supporting government and private sector measures toward development of the capital market. These supports resulted in improved stock market conditions as indicated by increases in market turnover and stock prices and a revival of investor interest.With these achievements, the Fund Committee decided to terminate the Fund and to use the Fund’s profits for the promotion and development of the Thai capital market. CDF was officially terminated by the order of the Minister of Finance on June 12,1989. The Fund liquidation was completed on September 25,1992.
After liquidation , CDF was left with a profit of Baht 496.38 million. According to the agreement, the Fund committee was authorised to decide how this money would be used for capital market development and related activities. The Committee decided to divide the fund into two amounts. The first amount of Baht 200 million was allocated to the Office of the Securities and Exchange Commission (SEC) as its initial capital in accordance with the Securities and Securities Exchange Act,B.E.2535. The second amount of Baht 296.38 million was given to the Capital Market Development Fund Foundation ,an organisation established on January 14,1992 to promote and support the development of Thai capital and financial markets.