Council of State rules SEC use of reserves for losses is legal

Thansettakij•Economy•1d ago

Reader Briefing

The Council of State ruled that the Securities and Exchange Commission has the legal authority to use general reserves to offset operational losses.

•The Council of State issued opinion 649/2026 regarding the SEC's power to reduce general reserves when income is lower than expenses.
•The State Audit Office had previously questioned the lack of supporting criteria for transferring losses into general reserves during the 2025 fiscal year audit.
•The Council of State concluded that the SEC's actions do not violate Section 35 of the State Fiscal and Financial Discipline Act.
•The ruling confirms the SEC can have operational losses by utilizing reserves approved by the Minister of Finance.

•The State Audit Office expressed concerns during the audit of the Securities and Exchange Commission's 2025 financial statements regarding the transfer of losses to general reserves.
•The Securities and Exchange Commission sought a legal opinion from the Council of State to resolve the disagreement with the State Audit Office.
•The Securities and Exchange Commission has allocated general reserves since 1996, with criteria approved by the Minister of Finance on July 24, 1996.
•The Securities and Exchange Commission first utilized general reserves to cover losses from the year 2000, as approved by a board resolution on April 25, 2001.
•The Council of State stated that as a state agency not receiving a national budget, the Securities and Exchange Commission requires a reserve system to handle financial risks and revenue volatility.
•The Council of State found that the action aligns with Section 26 of the Securities and Exchange Act and general accounting standards under the Federation of Accounting Professions Announcement 33/2019.
•The Council of State concluded that the Securities and Exchange Commission has the authority to reduce general reserves in years with operational losses.
•The legal opinion was signed by Mr. Nophadol Phereeruek, Deputy Secretary-General acting as Secretary-General of the Council of State.

Full article content is available on the original source.

Office of the Council of State(สำนักงานคณะกรรมการกฤษฎีกา)ℹ️

The agency that provided the legal opinion regarding the SEC's use of reserves.

Securities and Exchange Commission(สำนักงานคณะกรรมการกำกับหลักทรัพย์และตลาดหลักทรัพย์)ℹ️

A state agency that regulates the capital market and sought legal clarification on using reserves to cover losses.

State Audit Office(สำนักงานการตรวจเงินแผ่นดิน)

The body that audited the SEC's 2025 financial statements and questioned the reserve transfers.

Ministry of Finance(กระทรวงการคลัง)ℹ️

The ministry whose Minister approves the criteria for the SEC's general reserves.

Fiscal Policy Office(สำนักงานเศรษฐกิจการคลัง)

The representative of the Ministry of Finance that provided facts to the Council of State.

Federation of Accounting Professions(สภาวิชาชีพบัญชี)

The professional body that issued the accounting standards cited by the Council of State.

Securities and Exchange Act 1992(พระราชบัญญัติหลักทรัพย์และตลาดหลักทรัพย์ พ.ศ. 2535)

The law governing the SEC's operations, specifically Section 26 and 27 regarding reserves.

State Fiscal and Financial Discipline Act 2018(พระราชบัญญัติวินัยการเงินการคลังของรัฐ พ.ศ. 2561)

The law whose Section 35 was analyzed to determine if the SEC's reserve usage was a violation.

Nophadol Phereeruek(นพดล เภรีฤกษ์)

Deputy Secretary-General acting as Secretary-General of the Council of State who signed the opinion.