THAILAND: SEC of Thailand Proposes Amendment to Regulations of Debt Securities

Friday February 14 2020

The Securities & Exchange Commission of Thailand (SEC) proposed amendment to its regulations of debt securities, aims to enhance investor protection mechanisms and foster debt securities market developments that can facilitate growth of the economy.

The SEC has proposed the following key amendments.

• Type of investors eligible for a PP-10 placement will be revised to only include the institutional investors and the investors related to the issuer (director and management of issuer, shareholder holding 10% or more of issuer’s equity, issuer’s affiliates)
• An additional qualification requirement for issuers who offer debt securities to high net worth investors will be imposed to improve investor protection. Appling the same requirement as for a public offering basis, issuers must not default on a principal or interest payment of debt securities or on a loan payment of any financial institution.
• Only the investment grade bond can be offered on a medium-term note scheme (MTN) since the subsequent issue under MTN requires minimal scrutiny.
• Registration statement and prospectus shall be emphasized on the information which is material or specific to the issuers and the securities offered, especially issuer’s capital structure and financial situation. In addition, the disclosure shall be made on the topic of the detailed use of process and the company’s debt liability such as bond issuance, loan from financial institution.
• Issuers will be required to file financial reports sooner and more frequently, so that investors can have access to issuers’ most recent financial information.
• Factsheets will be revised to be more precise and in shorter length as the readers tend to dismiss reading a 10-page document. The risk scale will be determined to facilitate risk comparison across different issues. It will also include the average financial ratio of the industry and the return of those with similar risk profile to enable simple comparison. The disclosure of risk section will focus more on risk specific to that issuers rather than the general risk.
• Post-default processes will be determined to help and support investors such as issuers and registrars will be required to file the default report to the SEC and bondholders’ representatives.

Click on the above link for further information.