Bangkok, 2 February 2023 – The Securities and Exchange Commission (SEC) has amended the regulations governing approval for offering of newly issued shares to the public (IPO) in the part of issuer qualifications. In addition to clearer clarification of the requirement for non-involvement in illegal businesses in line with the regulatory intention, the amendments allow an IPO issuer to comply with the regulations efficiently.
On 19 October 2021, the Capital Market Supervisory Board (CMSB) Meeting No. 13/2564 passed a resolution approving in principle the proposed amendments to the IPO regulations in the part of IPO issuer qualifications whereby an IPO applicant shall not get involved in any illegal business. The proposed amendments are in line with the regulations for issuance of newly issued shares of public limited companies seeking listing on the Stock Exchange of Thailand’s LiVe Exchange. A public and stakeholder hearing on the matter was conducted during the months of May and June 2022.
The SEC later issued a notification concerning the amendments to the IPO approval regulations in the part of the issuer’s qualification of non-involvement in any illegal business. The essences of the amendments are as follows:
(1) Revising for greater clarity the qualifications of the IPO applicant in the part of non-involvement in any illegal business by excluding any insignificant misdemeanor or any wrongdoing not directly related to the issuer’s core business. In any event, the issuer must not operate business in such a way that involves severely illegal business. For example, human trafficking, drug production or smuggling, or money laundering, etc. Moreover, the issuer must not violate or fail to comply with the law, which may cause severe and significant effects on the issuer’s business;
(2) Empowering the SEC to lay out guidelines in detail regarding the consideration of cases involving severe legal violation or causing severe and significant effects.
In addition, the amendments to the IPO regulations apply to both Thai and foreign companies seeking a primary listing* and a secondary listing.** The amended regulations have been published in the Government Gazette and have become effective since 1 February 2023.
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Remarks
* Primary listing means an offering for sale of shares by a foreign company whose shares are not listed on a foreign exchange.
** Secondary listing means an offering for sale of shares by a foreign company whose shares are or will be listed on a foreign exchange.