Under SEC’s proposed disclosure requirements, funds that invest in leasehold rights of real estates or in future revenue sharing contracts of infrastructure projects (leasehold funds) are required to disclose this information to warn investors before they make investment decisions. For example, leasehold property funds (Type1), which are prohibited from investing in new assets, must give clear warnings at the end of the funds’ names.  While REITs and infrastructure funds with remaining agreement periods of less than 10 years must warn investors that the fund’s net asset value will gradually decline to zero at the end of the contract term and give the contract end date. A symbol must be added after the securities abbreviation to indicate that they are leasehold funds.

Regarding the disclosure of investment returns, currently Asset Management or REIT manager can disclose the funds’ estimated returns in an accounting period in the prospectus on a voluntary basis. As part of the new disclosure requirements, they will be required to disclose the Internal Rate of Return (“IRR”) in the fund prospectus and the annual report so that investors have more information to make investment decisions and to compare returns between investing in a leasehold fund and a freehold fund.

In addition, Asset Management or REIT manager must disclose the summary of cash flow from the asset appraisal reports to give analysts and investors enough information to analyze the funds. They are also required to improve information provided in the factsheet to make it concise and easy to understand so that investors can better understand the fund features and investment risks. Meanwhile, rules on selling practice of investment consultants have been revised accordingly.

The consultation paper can be found at www.sec.or.th/hearing. Stakeholders and interested parties are welcome to give comments and suggestions via the SEC website: www.sec.or.th/hearing, or facsimile at 0-2033-9694 or 0-2263-6558, or email: nuchanat@sec.or.th or teeranuch@sec.or.th. The public hearing ends on 30 November 2018.