SEC implements primary listing rules for foreign companies' public offerings on SET
The Securities and Exchange Commission has put into effect primary listing regulations to allow foreign companies to launch public offerings of shares in Thailand.
SEC secretary-general Vorapol Socatiyanurak said that under the regulations, the supervision of foreign companies’ public offerings would be in line with regulations applicable to Thai companies, though certain significant requirements had been added.
n Shares publicly offered must be listed on the Stock Exchange of Thailand.
n Regulatory mapping in the area of investor protection must be prepared, providing that in cases where any issues under laws of foreign jurisdiction are less stringent than Thai laws, an investor-protection mechanism comparable to Thai laws must be arranged.
n Home-country regulators are able to provide assistance in investigations and the exchange of information relating to violations of securities law.
n At least two directors must be Thai nationals and reside in Thailand, providing that at least one of them is an independent director and an audit committee member.
n Preparation of financial statements must be in accordance with either Thai accounting standards or specified internationally accepted accounting standards.
n The SEC-approved financial adviser must provide service and advice for three years.
n Additional information must be disclosed in the registration statement (filing form), including rights of investors and investor protection, restrictions and associated risks, such as lawsuits, other legal proceedings and restrictions of capital outflows.
In a case where a foreign company launches public offerings of shares through a holding company founded in Thailand – that is, indirectly offers the shares through such a holding company – the primary listing regulations will apply as well. However, if the holding company was founded in Thailand and owned by Thais but invests in a subsidiary founded offshore that operates a core business, only some provisions of the primary listing regulations will apply – regulatory mapping, for instance.
"Primary listing of foreign shares will promote the Thai capital market’s linkage with regional and global markets," Vorapol said.
"As such, alternatives for both fund-raisers and investors will be widened, which will not only foster the growth and attractiveness of the Thai capital market, but will also back fund-raising and sustainable growth of Thai businesses offshore as well as foreign businesses in need of funds, especially those in neighbouring countries."
