Thai SEC to launch new schemes for cross-border securities offerings

The SEC will issue the regulations to promote more financial product variety and thus widen investment choices on foreign securities for investors in Thailand.

Prakid Punyashthiti, SEC Assistant Secretary – General, said that the SEC is drafting the regulations on primary listing to allow foreign companies to launch initial public offerings (IPOs) and become listed firms on Thai bourse as well as the regulations governing offer of sale of depositary receipts (DRs) on foreign securities. The promulgation of those regulations is under the SEC strategic plan, aiming to expand the universe of financial products and services for investors.

The regulations will emphasize on information disclosure and appropriate level of investor protection. Foreign companies intend to raise fund in Thailand will be subject to the similar approval criteria and other relevant regulations applicable to Thai companies. Moreover, certain rules will be added; for example, corporate law governing foreign companies must be substantially comparable to Thai law, in particular, the material issues such as shareholder rights. In case of DRs, the permissible issues must satisfy that the DR underlying assets are either shares of foreign company or investment units of exchange-traded fund (ETF) listed on major exchanges.

Besides, those having interest in foreign securities investment should thoroughly study the information on differences in governing laws and rights along with country risk and foreign exchange risk.