SEC Secretary-General Ruenvadee Suwanmongkol said that bonds are an important mean of fund-raising that the business sector uses to create liquidity and expand their businesses, as well as use as substitutes of or additions from loans from financial institutions. Most of the bonds are credible to invest in, called investment grade, yet there are some that are not as credible, called non-investment grade, as well as some that remain unrated, on which SEC regulates strictly to protect the investors.

Furthermore, the SEC has been closely following the issuing and sale of private bonds. Since June 2019, SEC found that non-investment grade bonds and unrated bonds take up 6 percent of all private bonds. The overall number of bond issuers had decreased in comparison to 2018, more than half of the number was long-term bonds. In recent times, SEC has been revising and changing bond-related regulations to become stricter, increasing the protection of the investors by making it mandatory to provide sufficient and complete information, as well as continuously providing knowledge and understanding on investment in bonds to the public.

Moreover, SEC has established a mechanism for the investors to be able to understand the risks of bonds and up-to-date information before their investment, as well as to make information become easier to access. Therefore, SEC has improved the supervision guideline on the bond market in 2019, which was approved by the boards of directors of both SEC and SET. The revised regulations are expected to be enforced in the first quarter of 2020, including (1) limiting the number of investors in a closed sale circle to not exceeding 10 investors, and they must be committees, boards, major shareholders, or affiliated companies of the issuers of bonds and institutional investors, (2) adding more preventive regulations for major investors to be as close to those of the general investors, (3) changing the regulations that the issuers of bonds must submit their financial statements every six months, from once a year, (4) improving the characteristics of the summary of important information of bonds, which are called “factsheets”, to become more precise, concise, attractive, readable, easily understandable, in order to compare the risks easier, and (5) mandating that the issuers of bonds and securities registrars must report to the bond holders’ representatives in case of any defaults of payment, for them to have sufficient information to proceed to the next procedures more quickly.

SEC has also closely following up with the operation of credit rating agencies, as well as supervising them to exercise their due responsibilities, rating the credibility of bonds, that they are up to international standards and regulations, namely, that  (1) the rating process is of quality and credible, (2) the operation is independent, (3) they apply the principle of good governance in their risk management and personnel management, (4) they disclose correct and sufficient information, as well as elevate the operation of bond holders’ representatives to be of the same standard, and are expected to exercise their duties protecting the benefits of the bond holders.

To accommodate the investors, SEC has also developed the SEC Bond Check application, for easy access to the names of bonds that are issued and on sale, the tenor, the rates of interest, the risk levels, as well as the ability to compare such levels between all bonds on sale at the same time. The application is available for download for both the iOS and Android operating systems at https://is.gd/nDqpEE.

_______________________________