Public hearing on foreign companies' share offerings start
July 22, 2014 00:00 By The Nation
The Securities and Exchange Commission is seeking public comments on the proposed information disclosure rules for foreign companies offering equities in Thailand.
The rules are in three categories: the first concerns the primary listing for companies that seek to list only on the Stock Exchange of Thailand; the second concerns the dual listing for companies that seek to list on two bourses in Asean under the Asean Capital Markets Forum (ACMF) framework; and the third for the offering not in the first two categories.
"The proposed rules aim at providing investors with information disclosure closely similar to that prepared by Thai companies while not being too burdensome for foreign firms raising fund in Thailand," the SEC said.
Yesterday, the watchdog announced the plan to allow foreign companies’ initial public offerings (IPOs) in Thailand (primary listing) and dual offering of equities in Thailand and other countries simultaneously, aiming to enhance competitiveness of Thai capital market.
The Capital Market Supervisory Board recently approved the regulations on foreign equity offerings.
“Development of Thai capital market to become even more attractive to global investors is, of course, among the SEC’s priority," said SEC Secretary-General Vorapol Socatiyanurak.
"One way to support the said development is to ensure that our capital market can also serve as a fund raising channel for expansion of foreign businesses and economies while providing a variety of investment choices for investors. 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."
Some of the proposed rules are as follows:
· Equity offerings must comply with laws and regulations in home jurisdictions.
· Laws and regulations on shareholder protection are equivalent to those in Thailand.
· Capital market regulators of the countries where issuing companies are incorporated have the authority to collaborate with the SEC in terms of enforcement and exchange of information on violations of relevant laws and regulations.
· At least two Thai residents serve on board of directors, of which at least one director is independent director and audit committee member.
· Financial statements must be prepared in accordance with Thai accounting standards or International Financial Reporting Standards (IFRS)
Auditor must be on the SEC approved list.
· Financial advisor must be on the SEC approved list and provide the service for three years.
For Thai-based holding companies, with major foreign shareholders and oversea core businesses, if planning to offer equities in Thailand and be listed on the SET will be considered as direct foreign equity offerings. Accordingly, the companies must comply with the same rules and additional rules and conditions as the case of primary listing. Nonetheless, holding companies with majority of Thai shareholders or controlled by
Thai shareholders will be subject to the rules applicable to Thai companies.