## tarea2026062

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---

### Mission purpose, logistics, and training
- Mission: IMF MCM technical assistance mission on risk-based supervision (RBS) in capital markets at the request of the Securities and Exchange Regulator of Cambodia (SERC).
- Location and dates: Phnom Penh, Cambodia, Dec 1–5, 2025.
- Objectives:
  - undertake a diagnostic assessment of the securities market, its regulatory and supervisory framework, the risks and vulnerabilities and identify gaps to effectively transition to a risk-based supervision framework;
  - provide a high-level training on risk-based supervision in securities markets to SERC senior and technical staff.
- Participants and engagement:
  - Mission leader: Ms. Nila Khanolkar, Senior Financial Sector Expert, IMF.
  - Meetings with: H.E. Mr. Sou Socheat (Director General, SERC), H.E. Dr. Vin Pheakdey (Deputy Director General and Chair of the FinTech Working Group of SERC), senior management and technical staff across SERC departments, industry representatives (CSX, a fund management company, a trustee company, CASF, Derivatives Broker Association), and international TA providers (ADB, WB, IFC).
  - Training delivered to technical and senior staff from three supervision departments (Securities Issuance Supervision Department, Securities Intermediaries Supervision Department and Securities Market Supervision Department).
- Training topics: introduction to RBS (including differences with banking/insurance RBS), risk assessment frameworks, supervisory engagement and resource allocation, intervention frameworks, implementation challenges; included ASEAN RBS examples and three group discussions with breakout sessions.
- Coordination: IMF mission interacted with ADB, World Bank (WB) and IFC; none had provided or committed TA to SERC on RBS.

### Market overview — structure, depth, and concerns
- Market structure and products:
  - One stock exchange: Cambodia Securities Exchange (CSX).
  - Derivatives market: Contract for Differences (CFDs) operating OTC (introduced 2017); plans to introduce swaps, options and futures and commodity futures (with IFC assistance).
  - Collective Investment Schemes (CIS): one active licensed CIS.
  - Intermediaries: variety of intermediaries supporting market activities; derivative market entities differ from equity/bond market entities.
- Market depth and participation:
  - CSX listings: 12 equity-listed companies (nine on the Main Board and three on the Growth Board).
  - Market capitalization: around USD 2.91 bn (as of end-2025).
  - Equity trading: average daily trading volume of ~95,000 shares amounting to approximately USD 0.11 million in 2025.
  - Foreign investor share: foreign investors account for only ~7 percent of the equity holdings by value.
  - CSX plans: introduce margin trading in 2026; preliminary market making discussions underway.
- Bonds:
  - Fourteen companies have listed their bonds on the CSX so far.
  - Around half of them are outstanding as on date of the mission; the rest have matured.
  - Bond features:
    - include public bonds and qualified-investor-only bonds;
    - higher popularity than equities supported by high coupon rates (~9 percent) and bond guarantees;
    - recent issues include two green bonds and one sustainability bond; proposals to introduce social bonds;
    - bonds are held to maturity with practically no secondary market.
  - Issuers: domestic firms; investors in bond markets are largely international investors (foreign life insurance companies prominent).
  - Aggregate fundraising: 26 companies have listed their stocks and bonds on the CSX, raising a total of USD 651 mn so far.
  - Government bonds: primary market under National Bank of Cambodia jurisdiction; no secondary market; ‘profile listing’ on CSX primarily for disclosures.
- OTC derivatives (CFDs) specifics:
  - CFDs most popular on gold; product-wise leverage limits can be as high as 1:200.
  - CFDs sold mainly to domestic retail investors.
- Asset management and CIS:
  - Active licensed entities: one active CIS, one active licensed fund manager (Banjaran Asset Management (Cambodia) Plc — BAMC) and one active licensed trustee company (Stronghold Trustee Co. Ltd.).
  - Licensed counts vs active: 12 entities hold a fund management company license (only one operational); 6 entities hold a trustee company license (only one operational).
  - Additional licensed roles: 7 fund distributors (3 active); 6 fund administrators (2 active).
  - CIS investor base: operational CIS (launched 2023) primarily raises funds from domestic retail investors and invests in foreign equity.
  - Pipeline: four CIS are under process with SERC.
- CSX ownership and operations:
  - Ownership: CSX is owned 55 percent by the Cambodian government and 45 percent by the Korea Exchange.
  - Unified structure: trading, clearing and settlement, and depository functions housed within CSX.
  - Settlement cycles: equities on a T+2 basis; bonds on a T+1 basis (depending on buyer and seller preferences).
  - CSX self-regulatory functions: first-round IPO review, daily monitoring of disclosures, limited daily market surveillance via ‘MarketWatch’ (largely manual), working with SERC to develop automated surveillance.

### Industry constraints and concentration risks
- Concentration:
  - Many licenses but few active firms, yielding high concentration risk across brokers/dealers, CIS operators, custodians, registrars, transfer and paying agents.
  - Only one active CIS and one of each related CIS operator active; three more CIS under process may help diversify.
- Business model constraints:
  - Fund raising challenges due to lack of secondary market liquidity deter institutional investors, creating cyclical illiquidity.
  - Lack of investor confidence amplified by pervasive scams and low financial literacy.
  - Lack of qualified experts and limited distribution channels constrain sector growth.
  - Operational issues: lack of electronic KYC and KYC procedures; use of CSX IT systems by brokers/dealers creates dependency on CSX IT development.
  - Supervisory concerns: mis-selling by unlicensed derivatives representatives.

### Regulatory architecture and mandates
- Legal and institutional framework:
  - Key laws: Law on the Issuance and Trading of Non-government Securities (2007) and Law on the Conduct and Organization of the Non-bank Financial Services Authority (NBFSA) (2021).
  - SERC established in 2007; renamed SERC after NBFSA law adoption in 2021.
  - NBFSA (created 2021) integrates management and supervision of non-bank sectors; NBFSA has a financial stability mandate; SERC has no explicit financial stability mandate.
  - NBFSA chaired by the Minister of Economy and Finance; governing council includes ministry representatives, DGs of regulators (including NBC and SERC) and three independent experts.
  - Supervisory functions for securities markets are carried out independently by SERC.
- Ongoing/regulatory reforms (Securities Sector Development Strategy 2025-2035):
  - Amendments to enable SERC to sign IOSCO MMoU.
  - Frameworks for Fintech, Digital Assets, Crowdfunding Platforms, peer-to-peer financing.
  - New markets/products: swaps, options and futures; commodity futures; securities financing and margins.
  - Strengthening AML/CFT Guidelines and adopting a corporate governance code.
- Annexed mandates and roles:
  - SERC mandates include investor protection, fair market, development, licensing, supervision, and facilitation of privatization (Article 7 of the Law on the Issuance and Trading of Non-Government Securities 2007).
  - NBFSA roles include legislating non-bank financial sectors, initiating policy and strategy, enhancing market confidence, preventing financial crime, and contributing to financial stability.

### SERC supervisory structure, resources, and practices
- Supervisory departments and staffing:
  - Securities Issuance Supervision Department: four divisions with 22 staff; handles primary markets, pre-and post-listing functions, accounting supervision, corporate governance; deals with issuance of equity, bonds, CIS, securitization.
  - Securities Markets Supervision Department: three divisions with 23 staff; handles licensing, regulation and supervision of market infrastructure institutions and market participants, market abuse surveillance, investor ID, investor education contributions.
  - Securities Intermediaries Supervision Department: four divisions with 29 staff; handles licensing, regulation, and supervision of securities market intermediaries, derivatives market operators, CIS operators; responsible for Fintech sandbox and digital assets activities (Prakas and guideline adopted in 2023; Prakas adopted in 2025).
  - Legal Department: supports regulation development, complaints, investigations, and enforcement; enforcement toolkit includes administrative sanctions and fines; criminal cases forwarded to the Prosecutor.
- Licensing counts (as reported):
  - Securities Underwriter: 7
  - Securities Dealer: 7
  - Securities Broker: 12
  - Financial Advisory Firm: 2
  - Investment Advisory Firm: 1
  - Securities Selling Firm: 3
  - Government Securities Intermediary Firms: 3
  - Central Counterparties (Derivatives): 5
  - Derivative Brokers: 18
  - Trustees: 6
  - Fund management companies: 12
  - Fund administrators: 6
  - Fund distributors: 7
  - Fintech Regulatory Sandbox in Securities Sector: 6
  - Market Operator (Operator of Securities Market, Operator of Clearing and Settlement Facility, and Operator of Securities Depository): 1
  - Cash Settlement Agents: 8
  - Registrar Agent, Transfer Agent and Paying Agent: 3
  - Bondholder representatives: 4
  - Credit Rating Agency: 1
  - Custodian Agent: 1
  - Associations: 3
  - Note: Some firms have multiple licenses; SERC also licenses support professionals (law firms, IT firms, audit firms, valuation companies).
- Supervisory approach and capacity constraints:
  - SERC’s approach is primarily compliance-based.
  - Offsite supervision focuses on compliance checks (e.g., capital requirements); reporting formats comprehensive but manual and difficult-to-process.
  - Onsite inspections: approximately 70 onsite inspections conducted in the last five years; inspection manuals developed in 2024/2025 (in Khmer) with detailed compliance-focused guidance; elements of RBS present in entity selection for inspection (based on risk profile, complexity, past compliance) and a scoring mechanism to shortlist high-risk entities.
  - Key challenges: skills shortage, resource intensity of inspections, incomplete/inconsistent data, restricted access to sensitive documents, reliance on manual data, absence of robust risk-identification/assessment processes and an outcome-based intervention framework.
- Reporting and data issues:
  - Reporting frequency: daily, weekly, monthly, quarterly and annual, depending on license.
  - Key reporting challenges: manual data entry, processing of pdfs/images, use of messaging apps for data reporting raising privacy and data security challenges, absence of robust online reporting and analytical formats.
- Market abuse surveillance:
  - CSX market surveillance limited and largely manual; SERC undertakes partial excel-based surveillance; a holistic and robust online surveillance system is absent.
- Thematic supervision:
  - Thematic supervisory approach limited; some thematic onsite inspections (e.g., AML/CFT) conducted but active risk-focused thematic approach is absent.
- International cooperation:
  - ADB is a major development partner and is working on a policy-based loan ending 2030; ADB aided drafting the Securities Sector Development Strategy 2025-30.
  - World Bank provides TA on sustainability reporting; IFC provides TA to develop derivatives markets; SERC working with UK FCA to remove impediments for IOSCO MoU membership.
  - SERC has not requested TA on RBS from other international institutions apart from IMF.

### Diagnostic findings on risks and vulnerabilities
- Market-level concerns:
  - Fund raising challenges, limited secondary market liquidity, investor confidence concerns (amplified by scams and low financial literacy), high concentration risk in most sectors.
  - Equity fund raising hindered by lack of secondary market liquidity deterring institutional investors, creating cyclical illiquidity.
  - Bond markets feature high coupon rates (~9 percent) and guarantees; bonds are largely held to maturity with practically no secondary market.
- Supervisory vulnerabilities:
  - Supervisory model remains predominantly compliance-based with limited RBS elements.
  - Reporting formats are comprehensive but manual and not risk-focused, limiting analytical offsite supervision.
  - Absence of robust risk-identification and assessment framework, limited thematic supervision, and intervention framework focused on enforcement rather than risk mitigation.
  - Market surveillance systems are inadequate to detect market abuse.

### Recommendations and implementation sequencing
- Summary of main recommendations (with timeframes):
  - 1. SERC should review and strengthen the reporting formats with a view to make data in an analytical format, of high quality, and risk-based — ST
  - 2. SERC should develop a comprehensive risk-identification and assessment framework, suitable to the Cambodian context — MT
  - 3. SERC should develop a risk-based supervisory engagement, resource allocation and intervention framework — MT
  - 4. SERC should review and revise (or develop of, as needed) supervisory manuals in line with the revised risk-based supervisory framework — MT
  - 5. SERC should consider undertaking a phased approach to implementation of the RBS framework (including pilot projects, revisions to organizational structure, etc.) — MT
  - 6. SERC should undertake staff training and stakeholder communication (e.g. licensed firms, investors, etc.) on the new framework for effective transition to RBS — MT/LT
- Implementation details and priorities:
  - Priority ST action: strengthen reporting formats to enable online, analytical, risk-based data reporting (begin with usable formats such as excel, improve data quality through automation).
  - MT actions: establish a robust risk-identification and assessment framework; develop a holistic risk-based supervisory engagement, resource allocation and intervention framework; review and align supervisory manuals to RBS; consider phased implementation and pilots; review SERC powers to ensure no legal gaps hinder RBS transition.
  - MT/LT actions: conduct staff training and stakeholder communication strategy for licensed firms and investors to support transition.
- Implementation approach:
  - Phased transition recommended with pilots, training, organizational adjustments (e.g., RBS panels for quality control), and stakeholder communication.
  - Review reporting format in conjunction with establishment of the risk identification and assessment framework.

### Authorities' request and IMF follow-up
- Authorities have sought TA for transitioning to an RBS framework.
- IMF expert indicated this will be discussed within the Fund and will be subject to availability of expertise and resources.

*Source: IMF Technical Assistance mission report to the Securities and Exchange Regulator of Cambodia (SERC), December 2025.*

### Preface ................................................................................................................

### Preface

### Mission purpose and activities
- At the request of the Securities and Exchange Regulator of Cambodia (SERC), a Monetary and Capital Markets (MCM) Department mission visited Phnom Penh, Cambodia from December 1–5, 2025 to:
  - undertake a diagnostic assessment of the securities market, its regulatory and supervisory framework, the risks and vulnerabilities and identify gaps to effectively transition to a risk-based supervision framework; and
  - provide a high-level training on risk-based supervision in securities markets to SERC senior and technical staff.
- The mission met with H.E. Mr. Sou Socheat, Director General of SERC, H.E. Dr. Vin Pheakdey, Deputy Director General and Chair of the FinTech Working Group of SERC, senior management and technical staff from various departments, and industry representatives.
- The mission particularly acknowledged assistance from Ms. Likea Hor, Director of Research, Training, Securities Market Development and International Relations Department, and her team for logistics and coordination.

### Executive Summary

### Diagnostic and training components
- An IMF technical assistance mission on risk-based supervision (RBS) in capital markets was conducted in Phnom Penh in December 2025 with two components:
  - diagnostic analysis of the securities market, regulatory and supervisory framework, risks and vulnerabilities; and
  - high-level training on RBS in capital markets to SERC senior and technical supervisory staff.
- The mission met with SERC management, technical staff, industry, and international institutions providing TA to the authorities.

### Market overview and concerns
- Cambodia’s securities market is small but growing with:
  - one stock exchange (Cambodia Securities Exchange, CSX) with a small equity and bond market;
  - a derivatives market focused on Contract for Differences (CFDs);
  - one operating Collective Investment Scheme (CIS); and
  - a variety of intermediaries supporting market activities.
- Concerns identified:
  - fund raising challenges;
  - investor confidence concerns amplified by scams and low financial literacy;
  - limited secondary market; and
  - high concentration risk in most sectors.
- SERC has a Securities Sector Development Strategy 2025-2035 and receives capacity-building support from multiple international institutions (not including RBS).

### Supervisory approach and gaps
- SERC’s supervisory approach is primarily compliance-based:
  - reporting formats are comprehensive but manual processing and difficult-to-process formats make processes resource-intensive and limit analytical data;
  - detailed inspection manuals exist and there are some elements of a risk-based approach in the selection of entities for inspection, but onsite inspection remains compliance-based;
  - offsite supervision focuses primarily on compliance checks (e.g., capital requirements);
  - thematic supervision is limited;
  - SERC’s interventions are primarily enforcement-focused, ensuring compliance rather than risk mitigation.

### Overall mission recommendation
- A phased transition to a robust risk-based supervision framework is recommended, starting with strengthening reporting formats for online, analytical, risk-based data reporting, followed by establishing a comprehensive risk identification and assessment framework, a risk-based supervisory engagement and intervention framework, and alignment of manuals to RBS. Implementation to be phased with pilots, training, organizational adjustments, and stakeholder communication.

### Recommendations

### Summary of main recommendations (with timeframes)
- 1. SERC should review and strengthen the reporting formats with a view to make data in an analytical format, of high quality, and risk-based — ST
- 2. SERC should develop a comprehensive risk-identification and assessment framework, suitable to the Cambodian context — MT
- 3. SERC should develop a risk-based supervisory engagement, resource allocation and intervention framework — MT
- 4. SERC should review and revise (or develop of, as needed) supervisory manuals in line with the revised risk-based supervisory framework — MT
- 5. SERC should consider undertaking a phased approach to implementation of the RBS framework (including pilot projects, revisions to organizational structure, etc.) — MT
- 6. SERC should undertake staff training and stakeholder communication (e.g. licensed firms, investors, etc.) on the new framework for effective transition to RBS — MT/LT

Notes:
- Timeframe key: Short term (ST): < 12 months; Medium term (MT): 12 to 24 months; Long term (LT): 24 to 48 months.

### I. Introduction and Work Done

### Mission logistics and engagement
- The diagnostic mission was conducted in-person by Ms. Nila Khanolkar, Senior Financial Sector Expert from the IMF, in Phnom Penh for five days from Dec 1–5, 2025.
- Meetings held with:
  - SERC Director General, senior management, technical experts from Supervision departments, Legal department (also responsible for enforcement and complaints), and Research, Training, Securities Market Development and International Relations department;
  - industry participants including Cambodia Securities Exchange (CSX), a fund management company, a trustee company, Cambodian Association of Securities Firms (CASF), and Derivatives Broker Association in Cambodia.

### Training delivered
- High-level training on RBS in securities markets delivered to technical and senior staff from three supervision departments (Securities Issuance Supervision Department, Securities Intermediaries Supervision Department and Securities Market Supervision Department).
- Topics covered: introduction to RBS (including differences with banking/insurance RBS), risk assessment frameworks, supervisory engagement and resource allocation, intervention frameworks, and implementation challenges.
- Training included public RBS framework examples from ASEAN countries and three group discussions with breakout sessions. Legal Affairs Department staff attended sessions on intervention framework.
- Training materials are attached at Annex A.

### Coordination with other international TA providers
- The mission interacted with ADB, World Bank (WB) and International Finance Corporation (IFC) experts. None of these institutions have provided or committed TA to SERC on risk-based supervision in capital markets.
- IMF previously conducted a Financial Stability Sector Review in Cambodia in 2019 focused on banking supervision and provided a resident advisor on bank supervision at NBC from September 2022 till September 2025. That TA included strengthening RBS for banks and work on prudential scope of consolidation (ongoing), which could involve future cooperation with SERC if consolidated supervision is implemented.

### II. Institutional Set-Up

### Regulatory architecture and mandates
- SERC established in 2007 under the law on the Issuance and Trading of Non-Government Securities and the Sub-decree on the Conduct and the Organization of the Securities and Exchange Commission of Cambodia; later renamed SERC after adoption of the Law on the Organization and Functioning of the Non-Bank Financial Services Authority (NBFSA) in 2021.
- SERC mandates include investor protection, fair market, and development under the law (see Annex B for SERC’s mandates). SERC has no explicit financial stability mandate; NBFSA has a financial stability mandate.
- NBFSA (created in 2021) integrates management and supervision of non-bank sectors, including securities. NBFSA’s mandate covers insurance, private pension, securities and exchange, social securities, trust, accounting and auditing, real estate, pawnshop, and security as transfer sectors. Regulators including SERC are subordinated to NBFSA.
- NBFSA roles include legislation and regulation, development (including innovation), certain investigation and enforcement, and financial stability. NBFSA is chaired by the Minister of Economy and Finance; its governing council includes ministry representatives, DGs of respective regulators (including NBC and SERC) and three independent experts.
- Supervisory functions with respect to securities markets are done independently by SERC.

### III. Industry Overview — Primary and Secondary Markets

### Market structure and products
- Cambodia has a small but growing equity, debt and derivative markets.
- CSX (established in 2010, officially launched in 2011) lists stocks and bonds and is examining new products: Real Estate Investment Trusts, Infrastructure bonds and Exchange Traded Funds. There are no Collective Investment Schemes or derivatives listed on CSX.
- Contract for Difference (CFD), introduced in 2017, is currently the only product in the Cambodian derivative markets, operating Over The Counter (OTC). Plans exist to introduce swaps, options and futures and commodity futures (with IFC assistance) as well as securitization markets.
- Entities operating in derivative markets (derivative brokers, clearing counterparties) are completely different from entities operating in equity and bond markets.
- Unique feature: brokers/dealers rely completely on CSX’s IT systems, requiring CSX to focus heavily on IT development for new products/features.

### Market depth and participation
- CSX has 12 equity-listed companies (nine on the Main Board and three on the Growth Board). As of the end of 2025, total market capitalization was around USD 2.91 bn.
- Issuers are domestic across sectors including banking, real estate, and garments; three issuers are State Owned Enterprises (SOEs).
- Investors are primarily domestic retail investors; foreign investors account for only ~7 percent of the equity holdings by value.
- Equity trading is low: average daily trading volume of ~95,000 shares amounting to approximately USD 0.11 million in 2025.
- Equity fund raising is challenging due to lack of secondary market liquidity deterring institutional investors, creating a cyclical illiquidity effect.
- Investor trust and confidence concerns are amplified by pervasive prevalence of scams in the country.
- CSX plans to introduce margin trading in 2026 and there are preliminary discussions with respect to market making. Alongside investor education and financial literacy initiatives, these measures could improve secondary market trading and primary market listings.

*Source: IMF Technical Assistance mission report to the Securities and Exchange Regulator of Cambodia (SERC), December 2025.*

### 10.      Fourteen companies have listed their bonds on the CSX so far. Around half of them are

### 10.      Fourteen companies have listed their bonds on the CSX so far. Around half of them are

### Bonds and market structure
- Fourteen companies have listed their bonds on the CSX so far.
- Around half of them are outstanding as on date of the mission; the rest have matured.
- Bond types and features:
  - Include both public bonds and those issued only to qualified investors.
  - Bond issuances appear to be more popular than equities, supported by high coupon rates (~9 percent) and bond guarantees.
  - Recently issued bonds include two green bonds and one sustainability bond; there are proposals to introduce and potentially list social bonds.
  - Bonds are held to maturity and there is practically no secondary market.
- Issuers and investors:
  - Issuers are domestic firms (similar to equity markets).
  - Investors in bond markets are largely international investors; foreign life insurance companies, in particular, have shown interest and keenly participated.
- Aggregate fundraising:
  - In total, 26 companies have listed their stocks and bonds on the CSX, raising a total of USD 651 mn so far.
- Government bond market:
  - Government bond markets (primary market) operate under the jurisdiction of National Bank of Cambodia; there is no secondary market for government bonds.
  - There is a ‘profile listing’ of such bonds on the CSX, primarily for disclosures rather than trading.

### CSX ownership, operations, and planned developments
- Ownership and structure:
  - CSX is owned 55 percent by the Cambodian government and 45 percent by the Korea Exchange.
  - CSX operates under a unified structure where trading, clearing and settlement, and depository functions are housed within the same entity.
- Settlement cycles:
  - Equities are traded on a T+2 basis while bonds are traded on a T+1 basis, depending on buyer and seller preferences.
- Planned product and structural changes:
  - CSX plans to introduce margin trading in 2026; rules, including risk management, are being drafted.
  - There are discussions to separate the trading operations of CSX from its clearing, settlement and depository operations.
- Depository functions:
  - CSX’s depository arm focuses on securities holding, corporate actions, training and public awareness, and development of IT systems to support trading of new products.
  - Securities are mainly held electronically.

### CSX self-regulatory functions and surveillance
- SRO-like functions:
  - CSX undertakes a first-round review of IPO documents before review by SERC.
  - CSX undertakes daily monitoring of daily disclosures and ‘pre-reviews’ post-listing material event disclosures before making them public to advise firms on adequacy of disclosures.
- Division of responsibilities:
  - Requirements (including disclosure requirements) for IPOs, listing and post-listing are laid down by SERC.
  - Periodic disclosures, such as financial statements and corporate governance disclosures, are reviewed by SERC.
- Market surveillance:
  - CSX undertakes limited daily market surveillance through its ‘MarketWatch’ for detecting abnormal activity but lacks a robust surveillance system to detect market abuse.
  - CSX is working with SERC to develop an automated surveillance system; current surveillance is largely manual and excel-based.
- Supervisory scope:
  - CSX’s role in supervising brokers/dealers is limited.

### OTC derivatives (CFDs)
- Market characteristics:
  - Cambodia has an OTC derivatives market with one active product: Contract for Differences (CFDs).
  - CFDs have been offered in Cambodia since 2017.
  - Brokers offer CFDs on multiple products (precious metals, forex, equity indices, etc.), but the most popular product in practice is the CFD on gold.
- Investor base and leverage:
  - CFDs are sold mainly to domestic retail investors.
  - Product-wise limits on leverage can be as high as 1:200.
- Constraints:
  - Industry-cited challenges similar to equity/bond markets: financial literacy, lack of investor confidence due to scams, and lack of skilled derivative representatives (due to lack of adequate training).

### Asset management (Collective Investment Schemes and related entities)
- Active licensed entities:
  - Cambodia has one active licensed Collective Investment Scheme (CIS) and relatedly one active licensed fund manager and one active licensed trustee company.
  - At present, there are 12 entities holding a fund management company license and 6 entities holding a trustee company license from the SERC, but only one entity in each category is operational: Banjaran Asset Management (Cambodia) Plc (BAMC) as the active fund management company and Stronghold Trustee Co. Ltd. as the active trustee company.
- Ownership and licensing trends:
  - BAMC and Stronghold Trustee Co. Ltd. are foreign owned (Singapore and Taiwan respectively).
  - SERC has been actively revoking licenses of non-operational fund management companies and trustee companies, reducing the number of license holders over time.
  - Trustee companies are usually also licensed with the Trust regulator; the non-CIS part of the trustee business dominates in Cambodia.
- Other licensed roles:
  - There are 7 licensed fund distributors, of which 3 are active.
  - There are 6 licensed fund administrators, of which 2 are active.
- CIS operations and investor base:
  - The operational CIS (launched in 2023) primarily raises funds from domestic retail investors and invests in foreign equity.
  - Attempts are underway to increase domestic institutional investor participation, particularly by National Social Security Fund (NSSF) and insurers.
  - NSSF is currently permitted to invest only in domestic and not in foreign equity.
- Industry constraints:
  - Investor confidence and literacy concerns (recent scams) have heavily eroded investor trust, including in CIS.
  - Concerns around AML/CFT risks, reputational risks, and lack of liquidity in domestic markets have deterred foreign players.
  - Distribution channels are limited; regulatory approvals for banks and insurers to operate in this sector present issues.
  - The sector lacks qualified experts, resulting in resourcing constraints.
- Pipeline:
  - There are four CIS which are under process with the SERC.

### Intermediaries and concentration risks
- Types of intermediaries:
  - Include securities firms (brokers, dealers, underwriters, investment advisors, financial advisors), CIS operators (fund managers, trustee companies, fund distributors, fund administrators), derivatives market firms (brokers, central clearing counterparties), and market participants (custodians, registrars, transfer and paying agents, cash settlement agents).
- Licensing flexibility:
  - Licensing permits firms holding an underwriting license to also conduct dealing and broking within the same license; similarly, a dealing license can include broking. Many firms hold the underwriting/dealer license and undertake multiple businesses.
- Market focus:
  - Intermediary activities are primarily focused on domestic markets and investors; broking activities focus on domestic retail investors, underwriting focuses on domestic issuances.
  - One securities firm has an investment-advisory license focusing on services to high-net-worth international investors.
- Concentration and operational risks:
  - While many entities are licensed, only a few are active, resulting in high concentration risk.
  - There is only one active CIS and one of each related CIS operator active; three more CIS are under process which may help diversify the sector.
  - Concentration risks also present in broking/dealing, custodians, registrar, transfer and paying agents, etc.
- Business constraints for securities firms:
  - Lack of enough IPOs/fund raisings and lack of liquidity in secondary markets hinder underwriting and broking business models.
  - Many firms sustain through corporate advisory services.
  - Industry cites lack of easily accessible public information about Cambodian securities (e.g., on Bloomberg) as a deterrent for foreign investor interest.
  - Operational issues include lack of electronic KYC and KYC procedures.
  - Supervisory concerns include mis-selling by unlicensed derivatives representatives.

### Regulation and supervision: framework and SERC capacity
- Regulatory framework:
  - Covered by laws, sub-decrees, Prakas, and Guidelines.
  - Two key laws: Law on the Issuance and Trading of Non-government Securities and the Law on the Conduct and Organization of the Non-bank Financial Services Authority.
  - Prime Minister can issue sub-decrees (Anukret); Minister of Ministry of Economic and Finance and Chairman of NBFSA can issue Prakas.
  - SERC may adopt guidelines to facilitate understanding and compliance with Prakas.
  - The NBFSA now has important final approval powers over rule-making in the nonbank financial sector including securities market.
- Ongoing/considered regulatory reforms (in line with Securities Sector Development Strategy 2025-35):
  - Amendments to the Law on the Issuance and Trading of Non-government Securities to fulfil preconditions enabling SERC to sign the IOSCO Multilateral Memorandum of Understanding (MMoU).
  - Regulatory framework for emerging issues: Fintech, Digital Assets, Crowdfunding Platforms, peer-to-peer financing.
  - Regulatory framework to establish new markets/products: swaps, options and futures; commodity futures; securities financing and margins.
  - Strengthen existing regulatory requirements: implementation of new AML/CFT Guidelines for securities intermediaries to align with FATF/APG mutual evaluation; adopt a corporate governance code with mandatory and voluntary guidelines.
- SERC supervisory structure and staffing:
  - SERC has three supervision departments dealing with issuance, markets and intermediaries:
    - Securities issuance supervision department: four divisions with 22 staff; handles primary markets, pre-and post-listing functions, accounting supervision, corporate governance; deals with issuance of equity, bonds, CIS, and securitization instruments.
    - Securities markets supervision department: three divisions with 23 staff; handles licensing, regulation and supervision of market infrastructure institutions and other market participants, market abuse surveillance, and provision of investor ID; contributes to investor education.
    - Securities intermediaries supervision department: four divisions with 29 staff; handles licensing, regulation, and supervision of securities market intermediaries, derivatives market operators, and CIS operators; responsible for Fintech sandbox and digital assets activities (Prakas and guideline adopted in 2023; Prakas adopted in 2025).
  - SERC’s legal department supports regulation development, complaints, investigations, and enforcement; enforcement toolkit includes administrative sanctions and fines; criminal cases forwarded to the Prosecutor.
- Licensing and entity counts (as reported):
  - Securities Underwriter: 7
  - Securities Dealer: 7
  - Securities Broker: 12
  - Financial Advisory Firm: 2
  - Investment Advisory Firm: 1
  - Securities Selling Firm: 3
  - Government Securities Intermediary Firms: 3
  - Central Counterparties (Derivatives): 5
  - Derivative Brokers: 18
  - Trustees: 6
  - Fund management companies: 12
  - Fund administrators: 6
  - Fund distributors: 7
  - Fintech Regulatory Sandbox in Securities Sector: 6
  - Market Operator (Operator of Securities Market, Operator of Clearing and Settlement Facility, and Operator of Securities Depository): 1
  - Cash Settlement Agents: 8
  - Registrar Agent, Transfer Agent and Paying Agent: 3
  - Bondholder representatives: 4
  - Credit Rating Agency: 1
  - Custodian Agent: 1
  - Associations: 3
  - Note: Some firms have multiple licenses; SERC also licenses support professionals (law firms, IT firms, audit firms, valuation companies).
- Supervisory approach and capacity constraints:
  - SERC largely adopts a compliance-based approach; offsite and onsite supervision focus on compliance checks.
  - Approximately 70 onsite inspections were conducted in the last five years.
  - Supervisory manuals developed in 2024/2025 include onsite inspection manuals (in Khmer Language) with detailed guidance; focus is on compliance with regulations.
  - Offsite supervision emphasizes compliance with prudential net capital requirements, among others.
  - Onsite inspections incorporate elements of risk-based supervision (selection based on risk profile, complexity, past compliance) and use a scoring mechanism to shortlist high-risk entities.
  - Challenges for onsite inspections: skills shortage, intensity of resource utilization, incomplete/inconsistent data, restricted access to sensitive documents, and reliance on manual data.
  - A robust risk identification and assessment process, resource allocation and supervisory intensity based on risk and impact, and a clear risk and outcome-based intervention framework is absent.

*Source: tarea2026062 - 10.      Fourteen companies have listed their bonds on the CSX so far. Around half of them are*

### 28.      Some elements of risk-based supervision are also found in issuance supervision but

### tarea2026062 - 28.      Some elements of risk-based supervision are also found in issuance supervision but

### Supervision approach for issuance
- Some elements of risk-based supervision are present in issuance supervision but overall supervision "continue[s] to be primarily compliance-based."
- The securities issuance supervision department undertakes a focused review of certain Key Performance Indicators (KPIs) (e.g., liquidity risk, profitability risk) based on the financial statements submitted by listed companies. 19
- Focus areas include equity listed companies, and bonds issued to public investors.
- Overall supervision remains primarily compliance-based, e.g., review of compliance with corporate governance regulatory requirements.
- Footnote: 19 Given the limited number of listed companies, the department has indicated issues on calculating industry benchmarks.

### Market abuse surveillance
- There is a lack of a robust surveillance mechanism for market abuse.
- CSX undertakes a daily “market watch” for daily surveillance but a robust surveillance mechanism to detect market abuse is absent.
- SERC undertakes some excel-based surveillance for detecting market abuse, but a holistic and robust online surveillance system is absent.

### Reporting, data and offsite supervision
- Reporting formats are well-established but manual processes and lack of analytical formats make offsite supervision cumbersome and resource intensive.
- Reporting formats are laid down through different prakas/ guidelines and differ based on the license.
- Reporting broadly covers: capital/liquidity, state of business, certain financial items (e.g., revenue items), control and governance reports (e.g., internal control reports, internal audit report), organization, shareholding and management, complaints, etc.
- SERC also receives markets data (trading, clearing and settlement) periodically from CSX.
- Reporting frequency includes daily, weekly, monthly, quarterly and annual, depending on the license. 20
- Key challenge: lack of a robust online reporting process, resulting in:
  - Cumbersome manual data entry with risk of introducing errors;
  - Processing and analysis based on physical forms and difficult-to-process formats such as pdfs/images;
  - Use of messaging apps for data reporting raising privacy and data security challenges.
- Footnote: 20 In addition, the issuance supervision department deals with quarterly and annual disclosures by listed companies.

### Thematic supervision
- Thematic approach towards supervision is limited.
- Certain thematic onsite inspections such as AML/CFT have been conducted in the past.
- An active risk-focused thematic approach is absent.

### International cooperation and technical assistance
- SERC is working with several international institutions to develop the regulatory and supervisory framework in Cambodia.
- The largest development partner for the securities market in Cambodia is the Asian Development Bank (ADB), which is working closely with the Cambodian authorities on a policy-based loan which ends in 2030.
- The SERC, NBFSA, and NBC drafted the Securities Sector Development Strategy 2025-30 with the aid of ADB. 21
- ADB provides TA in areas such as development of government bond markets, development of the regulatory framework for Real Estate Investment Trusts (REITs) and Exchange Traded Funds (ETFs), etc.
- The World Bank provides TA with respect to sustainability reporting.
- The IFC is providing technical assistance to develop the derivatives markets. 22
- SERC is working closely with the UK Financial Conduct Authority to remove impediments to SERC signing IOSCO’s Memorandum of Understanding (MoU) to become an Ordinary Member.
- SERC is not receiving TA/has not requested TA on risk-based supervision from any other international institution, other than the IMF.
- Footnotes:
  - 21 Key measures under this plan includes development of a risk-based supervision approach and framework by SERC.
  - 22 It is also understood that IFC drafted a Cambodia Capital Markets Assessment Report recently, but details are not available publicly.

### Recommendations (six key recommendations to transition to risk-based supervision)
- Review and strengthening of the reporting formats with a view to make data in an analytical format, of high quality, and risk-based.
  - Current reporting formats are comprehensive but involve cumbersome manual processes and data in difficult-to-use formats.
  - Reporting formats are compliance-focused and not risk-focused.
  - There are data quality issues which utilize significant resources on a regular basis.
  - SERC should review and strengthen its reporting format, focusing on:
    - establishing an online reporting format (at the very minimum, begin with usable data formats such as excel),
    - improve data quality through automation,
    - review data reporting format to make it risk-based. 23
- Development of a risk-identification and assessment framework, suitable to the Cambodian context.
  - Supervision is largely compliance-based at present.
  - Some elements of risk-identification and assessment exist in selection of onsite inspections, but a holistic risk identification and assessment framework is absent.
  - SERC should consider establishing a robust risk-identification and assessment framework as the basis of a sound and robust risk-based supervisory framework.
- Development of a risk-based supervisory engagement, resource allocation and intervention framework.
  - Current supervisory engagement is risk-based to a limited extent (for selection of entities for onsite inspections).
  - A holistic framework for overall supervisory engagement (including offsite, onsite, thematic approaches, engagement with management, etc.) based on a robust risk-assessment framework is absent.
  - Resource allocation is not risk-based.
  - The intervention framework focuses on addressing non-compliance and penal actions rather than mitigation of risks.
  - Once the risk identification and assessment framework is in place, supervisory engagement, resource allocation and intervention framework should be based on assessed risks to form a holistic RBS framework.
  - SERC should review its powers to ensure no gaps, legal or otherwise, that could undermine its transition to RBS, particularly for intervention.
  - Supervisory engagement should include review and enhancement (if needed) of current domestic and cross-border supervisory cooperation.
- Review and revision (or development of, as needed) of supervisory manuals in line with the revised risk-based supervisory framework.
  - SERC already has a comprehensive set of inspection manuals drafted with a compliance-focus.
  - To transition to RBS, the manuals will need to be reviewed and revised in line with the RBS framework.
  - Other supporting manuals for transitioning to an RBS will need to be put in place.
- Implementation of the RBS framework (including pilot projects, revisions to organizational structure, etc.).
  - Implementing RBS is a massive exercise requiring substantial revisions to the current supervisory approach.
  - A phased approach may be suitable; consider pilot projects beginning with one/two sectors before extending RBS across the supervisory approach.
  - Implementing RBS may involve reviewing the current organization structure to establish structures necessary to support an effective RBS (e.g., RBS panels for quality control).
- Staff training and stakeholder communication (e.g., licensed firms, investors, etc.) for effective transition to RBS.
  - Staff training will be key to ensure current and new supervisory staff are adequately trained in the new RBS framework and its implementation.
  - SERC should consider devising a stakeholder communication strategy with external stakeholders who may be affected by RBS implementation (e.g., licensed firms, investors, etc.).

- Footnote: 23 The review of data reporting format to make it risk-based can be done in conjunction with the establishment of the risk identification and assessment framework.

### Authorities' request for TA
- The authorities have sought TA for transitioning their supervisory approach and framework to RBS.
- The expert indicated that this will be discussed within the Fund and will be subject to availability of expertise and resources.

### Annex excerpts (mandates, roles and laws)
- Annex B: Mandates & Roles of SERC and NBFSA
  - A. SERC’s Mandate (under Article 7 of the Law on the Issuance and Trading of Non-Government Securities 2007) includes:
    - To regulate, supervise and develop the securities sector in Cambodia;
    - To supervise and surveille of the securities market and its participants;
    - To enforce policy with respect to securities market;
    - To formulate conditions for granting approvals to the operators of a securities market, clearance and settlement facility, and securities depository;
    - To formulate conditions for granting license to securities companies and other players;
    - To formulate conditions for approval proposal to make public offering of securities and monitor compliance;
    - Develop and maintain the confidence of public investors in the Kingdom of Cambodia by protecting their lawful rights and ensuring that the offer, issue, purchase and sale of securities are carried out in a fair and orderly manner;
    - Promote the effective regulation, efficiency and orderly development of the securities markets;
    - Encourage the varieties of saving tools through buying of securities and other financial instruments;
    - Encourage foreign investment and participation in the securities markets in the Kingdom of Cambodia; and
    - Assist in facilitating the privatization of state-owned enterprises in the Kingdom of Cambodia.
  - B. NBFSA’s Roles and Duties include:
    - Act as legislator of insurance and private pension, securities and exchange, social securities, trust, accounting and auditing, real estate, pawnshop, and security as transfer sectors;
    - Initiates non-bank financial sector development policies and strategies as well as non-bank financial technology to the government;
    - Determines, monitors, and observes the implementation of the action plan and strategic plan for implementing non-bank financial sector development policies and strategies;
    - Enhances market confidence, supports investors, and prevents financial crime within the non-bank financial sector by initiating investigations, collecting information from relevant persons, and taking action on freezing of assets or bank account balances of relevant persons in the event of suspicion of non-bank financial crime in accordance with the law in force;
    - Contributes in the maintenance of and strengthening the stability of the financial sector; and encourages development of financial innovation.
    - Roles and Duties of the NBFSA Council (selected):
      - Examines and initiates the non-bank financial sector development policies and strategies as well as non-bank financial sector technology;
      - Puts forth strategic plans and action plans to implement non-bank financial sector development policies and strategies;
      - Examines and monitors the implementation of strategic plans and action plans of the Authority;
      - Examines and decides on the preparation of Prakas, Circulars and Decisions in order to manage the non-bank financial sector;
      - Examines and decides on conditions, procedures, and rules to issue, suspend and terminate licenses and/or certificates, approvals, accreditations, and registrations in the non-bank financial sector;
      - Promotes and enhances the implementation of and compliance with the provisions of the Law;
      - Monitors the fulfilment of roles and duties of subordinated regulators;
      - Examines and approves budget plan for the operation of the Authority and the regulators and subordinated entities of the Authority; and
      - Examines and decides the internal rules of the Authority.
- Annex C: List of Key Legislations and Regulations (selected titles as listed in the source)
  - Law on the Issuance and Trading of Non-government Securities
  - Law on the Conduct and Organization of the Non-bank Financial Services Authority
  - Sub-decree on the Conduct and Organization of the Securities and Exchange Regulator of Cambodia
  - Sub-decree on the implementation of the Law on the Issuance and Trading of Non-government Securities
  - Multiple Prakas and Guidelines related to licensing, supervision, disclosure, reporting, derivatives, CIS, and digital asset businesses (as listed).

*IMF Technical Assistance Report | pages 19–28*

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_Source: https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026062.pdf_