May 9, 2024
This is the first in a series of quarterly articles prepared by Tilleke & Gibbins’ capital markets practice group in Thailand, with a view to providing periodic updates on material changes to the relevant rules and regulations pertaining to securities laws in Thailand. Here are some of the key updates for the first quarter of 2024.
Amendments to “investment company” prohibition
The Securities and Exchange Commission (SEC) has amended the rules on the offering of securities and information disclosure where listed companies operating as an investment company would face consequences from regulatory arbitrage. The amended rules, which took effect on January 1, 2024, can be summarized as follows:
A company (excluding financial institutions) will be deemed an investment company if it invests in securities, derivatives, or digital assets without active participation in the management of the target business, and the total of the passive portfolio exceeds 40 percent of the company’s total assets according to its most recent financials.
Listed companies falling under the above definition of an investment company must disclose information related to their investments in the notes to their financial statements until the passive investment portfolio is less than 40 percent of their total assets.
The Stock Exchange of Thailand (SET) will publish a warning label (either “C” for caution or “SP” for trading suspension) next to the ticker symbol of any listed company that is deemed an investment company. Once this is done, the company will be unable to offer any securities under the Securities and Exchange Act of 1992 (as amended) (SEC Act), such as shares, warrants, and underlying shares, as well as debt instruments.
Amendments on offering of newly issued bonds by foreign issuers
Rules on the offering of newly issued bonds in Thailand by foreign issuers were revised by the SEC with a view to ensuring that the