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Regulations

Debt Securities

 

 

Debt securities provide a financing alternative which can reduce cost of funds paid to financial institutions. Issuers may determine the term of debt securities to be in line with their term of financial needs. On the investors' side, debt securities provide an investment alternative during the period of fluctuations in the capital market.


 

The Securities and Exchange Commission (“SEC") adopts various aspects of approaches to regulate debt securities. These approaches include:

  • Approval – issuers are required to apply for the approval to offer debt securities for sale. This will allow the SEC to carry out a preliminary scrutiny of qualifications of issuers for investors.

  • Disclosure – issuers are required to make complete and accurate disclosure of information relating to the debt securities which are in line with international standards to allow investors to have sufficient information to support their investment decision making.

  • Sales reports – issuers are required to report the sales of debt securities to the SEC within the required timeframe.

  • Post-offering obligations – issuers are required to make complete, timely and accurate disclosure of information on their financial reports and other material post-offering information.


Investors who purchase debt securities will become creditors of the issuers. Therefore, relevant regulations on the approval for the offer for sale of debt securities in a public offering (PO) or the offer for sale  of certain types of debt securities would require credit rating to be arranged by an approved credit rating agency. This is to allow the investors to have information on the financial position and repayment capability of the issuers when they make an investment decision. The credit rating of the issuers will be taken into consideration along with the disclosure of financial positions and operating results in the prospectus. Credit rating agencies are considered to have the responsibility of preparing information to assist investors with an investment decision making. Therefore, the SEC adopts regulatory approaches for credit rating agencies to be in line with the Code of Conduct Fundamentals for Credit Rating Agencies issued by IOSCO in 2015.​

The preliminary scrutiny of qualifications of issuers by the SEC does not provide an assurance that the investment in the SEC-approved debt securities do not entail risks. Each investor has different appetite and investment limits. In making an investment decision, investors should rely on their own examination of the securities.   


 

For More Information

​​Bond Department

Tel. +66-2263-6490 / +66-2033-4632  ​​​