SERC Signs Cooperation Agreement With IFC To Develop Cambodia's Derivatives Market
The Securities and Exchange Regulator of Cambodia (SERC) and the International Finance Corporation (IFC) signed a Cooperation Agreement to develop Cambodia's derivatives market on January 22, 2024, at Raffles Hotel Le Royal.
The agreement was signed by H.E. SOU Socheat, Delegate of the Royal Government and Director General of SERC, and Tom Ceusters, Director of Capital Markets and Investments at IFC, to assist SERC in developing a derivatives market in Cambodia.
Following the signing, SERC and IFC co-hosted a capacity-building program to offer in-depth insights into the derivatives market, which is an essential tool for businesses in Cambodia to hedge risks. The program covered topics such as derivative pricing and valuation, risk and risk mitigation mechanisms, and included case studies on regional and international market development.
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During the event, H.E. SOU Socheat stated that the derivatives market in Cambodia is still in its nascent stages. However, this market holds immense potential to contribute to the nation’s financial development by offering innovative financial instruments that support risk management and investment diversification.
Therefore, the journey ahead will require dedication, collaboration, and a shared commitment to excellence. As we sign this agreement today, let it symbolises more than just a document; let it be a testament to our collective determination to achieve meaningful and lasting progress.
Tom Ceusters also stated, “The establishment of a well-functioning derivatives market is crucial for enhancing financial stability, managing risks, and fostering economic growth. This partnership underscores our shared commitment to creating a transparent and efficient financial infrastructure that will benefit investors, businesses, and the broader economy.”
The event was attended by officials from the Ministry of Justice (MoJ), members of the National Bank of Cambodia (NBC), and various regulatory and industry participants.
Speaking to B2B in May 2024, H.E. Sou Socheat stated that the only type of derivative in Cambodia is the Contract for Difference (CFD), which was launched in 2017. There are CFDs on precious metals, CFDs on the index, and more.
The SERC is also planning to launch other products, such as futures contracts, or contracts that the banking sector refers to as ‘swaps’ or ‘options.’ However, it requires more time to prepare regulations and raise awareness among regulators, as well as the general public and traders in the market.