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Foreign firms allowed Thai IPO launches, simultaneous offerings

Jul 21. 2014
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By The Nation

Foreign companies will be allowed to launch initial public offerings in Thailand and simultaneous offerings of equities in Thailand and other countries.
“Development of the Thai capital market to become even more attractive to global investors is, of course, among the Securities and Exchange Commission’s priorities. 
“One way to support that is to ensure that our capital market can also serve as a fund-raising channel for the expansion of foreign businesses and economies while providing a variety of investment choices for investors,” secretary-general Vorapol Socatiyanurak said yesterday.
The Capital Market Supervisory Board recently approved regulations on foreign equity offerings both primary and dual.
In a primary offering, companies float shares to the public and become listed on the Stock Exchange of Thailand (SET).
 In a dual offering, foreign companies launch IPOs in Thailand and other countries simultaneously or in a proximate period. 
When the regulations go into effect next month, they will not only enhance the competitiveness of the Thai capital market and increase investors’ investment choices, but also conform to the rules for Asean offerings under the Asean Capital Markets Forum framework. Foreign companies eligible to launch equity offerings under the proposed regulations must comply with approval criteria, disclosure standards and other rules in the same manner as those applicable to Thai companies such as shareholder protection, prevention of conflict of interest and adequate information disclosure. 
Extra rules, conditions 
Additional rules and conditions will also apply. For example, equity offerings must comply with laws and regulations in home jurisdictions, laws and regulations on shareholder protection must be equivalent to those in Thailand, and capital market regulators of the countries where issuing companies are incorporated must have the authority to collaborate with the SEC in terms of enforcement and exchange of information on violations of laws and regulations.
At least two Thai residents must serve on the board of directors, of which at least one director is an independent director and audit committee member. 
Financial statements must be prepared in accordance with Thai accounting standards or International Financial Reporting Standards. The auditor must be on the SEC approved list and the financial adviser must be on the SEC approved list and provide the service for three years.
Thailand-based holding companies with major foreign shareholders and overseas core businesses that are planning to offer equities in Thailand and be listed on the SET will be considered as proposing direct foreign equity offerings. 
Those issuers must comply with the same rules and additional rules and conditions as in the case of a primary listing. 
However, holding companies that have a majority of Thai shareholders or are controlled by Thai shareholders will be subject to the rules applicable to Thai companies.
“Regulations on primary listing and dual offering are in line with those governing Thai equity offerings and add on certain necessary rules and conditions to ensure adequate investor protection, which will contribute to the Thai capital market’s growth and stability in the long run,” Vorapol added.
The move to allow foreign firms to raise funds in the stock market here was another factor contributing to the strengthening of the baht, said Roong Mallikamas, spokeswoman for the Bank of Thailand. 
This step should help widen and deepen the country’s capital market in the future, she said.

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