Securities and Exchange Regulator of Cambodia (SERC)

Overview

The Securities and Exchange Regulator of Cambodia (SERC) is the sole regulatory authority governing Cambodia's securities sector, established on October 19, 2007. SERC operates under the Ministry of Economy and Finance and plays a critical role in regulating, monitoring, and developing Cambodia's capital markets. The organization is tasked with protecting investors, ensuring market transparency, and promoting sustainable growth of the securities industry.

Current Leadership:

• Director General: H.E. SOU Socheat

• Deputy Director General: H.E. SEANG Thirith

SERC maintains an official presence through its website (serc.gov.kh) and serves as a member of international regulatory networks including the Sustainable Banking and Finance Network (SBFN), which it joined in August 2024.

Basic Identity

Classification

Inclusion Justification

What This Entity Oversees

Capital Markets Structure

Securities Exchange:

• Cambodia Securities Exchange (CSX) - Primary securities trading platform

• Limited trading volume historically

• Focus on institutional and government securities

Market Participants:

• Public limited companies and registered legal entities

• Securities companies and brokers

• Fund managers and investment advisors

• Custodians and depository participants

The Cambodia capital market remains nascent but is under active development by SERC, with strategic initiatives to broaden participation and modernize market infrastructure.

Financial Derivatives Market

SERC is developing Cambodia's derivatives market in partnership with the IFC to provide sophisticated hedging instruments:

• Forward contracts for currency and commodity hedging

• Futures contracts for institutional investors

• Options for advanced portfolio strategies

• Interest rate swaps for corporate debt management

Implementation timeline extends into 2025-2026 with regulatory framework development underway.

SERC mandates investor protection through:

• Mandatory disclosure of material information by listed companies

• Segregation of client assets held by securities firms

• Mandatory dispute resolution mechanisms

• Consumer awareness and education programs

• Participation in SBFN initiatives for sustainable finance

Regulatory Powers

SERC's supervisory functions include:

1. Market Monitoring - Real-time surveillance of trading activity and compliance

2. On-site Inspections - Regular audits of market participants

3. Information Requests - Authority to demand regulatory filings and data

4. Corrective Actions - Warnings, sanctions, and license suspension/revocation

5. Sanctions Authority - Fines, trading suspensions, and criminal referrals

Enforcement priorities include:

• Market manipulation and insider trading prevention

• Disclosure accuracy and timeliness

• Anti-money laundering and sanctions compliance

• Consumer protection and fraud prevention

Regulatory Role and Function

Legal Foundation

Primary Legislation:

• Law on the Issuance and Trading of Non-Government Securities (2007) - Royal Decree No. NS/RKM/1007/028, promulgated October 19, 2007

• Adopted by National Assembly: September 12, 2007

• Approved by Senate: October 4, 2007

• Formal Royal Promulgation: October 19, 2007

The law establishes SERC's mandate and regulatory powers, defining the framework for securities exchange, clearing and settlement systems, securities depositories, and other market operators. The legislation covers:

• Public offers and investor protection

• Trading and settlement mechanisms

• Licensing requirements for securities operators

• Market conduct and disclosure obligations

• Enforcement mechanisms and penalties

Implementing Regulations:

• Various Prakas (implementing decrees) issued by SERC providing operational guidance

• Additional ministerial circulars and guidelines

Licensing and Authorization Relevance

SERC maintains a tiered licensing framework for securities market participants:

1. Securities Companies - Brokers, dealers, and underwriters

2. Fund Management Companies - Collective investment scheme operators

3. Investment Advisors - Securities recommendations and portfolio management

4. Market Participants - Exchanges, clearing houses, and depositories

Licensing requirements include:

• Minimum capital requirements

• Professional competency standards

• Corporate governance requirements

• Fit and proper person assessments for management

SERC has prioritized fintech innovation and digital asset regulation as part of its 2024-2028 strategic vision:

FinTech Regulatory Sandbox:

• SERC is developing a dedicated regulatory sandbox framework to facilitate innovation while maintaining investor protection

• Enables testing of new fintech products and digital asset services in a controlled environment

Digital Asset Licensing:

• First licensed digital asset exchange (RGX) launched in early 2024

• Digital asset exchanges operate under SERC supervision

• Regulatory framework covers trading, custody, and market conduct for digital assets

Strategic Partnerships for Market Development:

• Cooperation agreement with International Finance Corporation (IFC) to advance digital markets

• Collaboration on derivatives market implementation including swaps, forwards, futures, and options

Payments and Money Movement Relevance

The Securities and Exchange Regulator of Cambodia (SERC) oversees securities settlement and post-trade infrastructure in Cambodia:

Payment Systems Governed or Overseen

The SERC oversees securities settlement infrastructure in Cambodia:

[Specific system names require verification from official sources]

Relationship to Other Regulators

IOSCO Participation:

SERC maintains relationships with international securities regulators and follows International Organization of Securities Commissions (IOSCO) principles for market integrity and investor protection.

Regional Engagement:

• ASEAN Securities Regulators Forum participation

• Bilateral cooperation with regional regulators

• Coordination on cross-border securities trading

Technical Assistance:

SERC collaborates with international development partners (IFC, World Bank) on capacity building and market infrastructure modernization.

Geography and Jurisdiction Notes

Important Departments and Divisions

Key Public Resources

Securities and Exchange Regulator of Cambodia (SERC)

• Website: https://www.serc.gov.kh/english/

• Address: Phnom Penh, Cambodia

• Official Language: Khmer/English

Key Departments:

• Market Supervision and Enforcement Division

• Registration and Licensing Division

• Securities Companies Supervision Division

• Information Technology and Market Operations Division

• Legal and Compliance Division

Notes on Naming and Language