At its meeting No.11/2563 on 19 May 2020 chaired by SEC Secretary-General Ruenvadee Suwanmongkol, the CMSB approved in principle of the amendment of rules applicable to funds and trusts which invest in real estate or infrastructure (funds and trusts) to create regulatory alignment as part of the regulatory guillotine project. The amendments are as follows:

(1)   Amending the rule on conducting an asset due diligence from every year after the previous due diligence to at least once in a calendar year, and permitting the use of other reliable methods to conduct an asset due diligence. The methods which are consensus between the fund/trust manager and the fund supervisor/or the trustee;

(2)   Amending the rule on determining rents by abolishing the requirement on the ratio of fixed rent to variable rent, and instead requiring the fund/trust to disclose to investors what is the minimum fixed rent of an asset;

(3)   Amending the rule on the distribution of benefits or dividends to make it more in line with the cash position of the fund/trust by permitting additional items such as overdue receivables from rent and services to be adjusted to the net income of the fund before distribution to unitholders;

(4)   Permitting an application to be made for an extension of the offer for sale of trust units by another six months, which is the same as an offer for sale period of securities, provided that the asset appraisal report reflects significant factors and is not more than one year old.

(5)   Permitting the delivery of documents relating to seeking a unitholders’ resolution in an electronic format.

In addition, the CMSB has resolved to relax the following requirements for business operations in 2020 to mitigate the impact of COVID-19, namely,

(1)   The asset due diligence, (2) the ratio of recurring income to total revenue, (3) allowing REITs to seek circular resolutions (not including the resolution on sale of assets), (4) reducing the time required for delivering documents seeking unitholders’ resolutions from not less than 30 days in advance to not less than 14 days, (5) permitting the fund/trust to get short-term loans to improve liquidity, (6) in case the appraiser cannot conduct the asset appraisal, the fund/trust manager must request a waiver from SEC and must analyze the impact of COVID-19 on the fund and disclose it to investors, (7) relaxing the rule of dividend distribution to unitholders by allowing the deduction of overdue rental receivables from the calculation of the adjusted net income of the fund.     

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Note: The regulatory guillotine is a rapid, transparent, low-cost and inclusive process of reviewing a large number of existing regulations to repeal those that are no longer needed and amend those that are not suited to the circumstances or hinder businesses or livelihoods, thus imposing unnecessary burdens on the public.