Sign In
Regulations

Equity Instruments

Regulations on equity instruments are aimed at creating a balance between the protection of investors and effective fund mobilization. The SEC considers qualifications of securities issuers and supervises the disclosure of information in order for the investors to have sufficient information in making an investment decision.

Regulations on issuing equity instruments are aimed at protecting the following group of investors:

  • New investors purchasing securities – the company is required to have appropriate qualifications and disclose sufficient information for investors to make an informed investment decision.

  • Existing shareholders affected by dilution – the company must disclose clear and sufficient information in the notice calling shareholders' meeting and the shareholders are granted the right to vote or to veto.

  • Securities holders in subsequent orders – the company must clearly disclose terms and conditions of the securities (if there is any) and must disclose sufficient information for making an investment decision.

The levels of regulations will depend on the type of securities being offered; whether they are existing or new securities and whether they are offered privately or publicly. These are important factors to determine the level of impact:

T​​ype of securities

Who offers the 

securities

Nature of offers

Regulations

New securities

Public company limited

Private Placement

General approval / no duty to disclose information

Public Offering

Require approval / disclosure of information

Existing securities

Owner of the securities

Private Placement

General approval /
​no duty to disclose information


Public Offering

Require approval / disclosure of information


 

Impact and mechanisms to preserve the right of stakeholders

Type of offers

Stakeholders

Impact

Mechanism to 

preserve rights

Rights Offering (RO)

Shareholders

None

Require approval of the shareholders

Private Placement (PP)

​ 

  • Price not lower than market price

 

 

  • Price lower than market price

Shareholders

 

 

New investors (private placement)

 

​Dilution effect

 

 

Access to information

Require approval of the shareholders

 

Self-preservation of rights/ general approval from the SEC

 

Require approval of the shareholders with disclosure of sufficient information in the notice calling shareholders' meeting and granting of the right to veto / request approval from the SEC

​Employee Stock Option Program (ESOP)

Shareholders

 

 

Director/ employee

Dilution effect

 

 

Access to information

Require approval of the shareholders

 

Self-preservation of rights/ general approval from the SEC

Public Offering (PO)

Shareholders

 

 

New investors (public)

Dilution effect

 

 

Access to information

Require approval of the shareholders

 

Require approval from the SEC / disclosure of information



For More Information

Corporate Finance Department 1-3​

Tel. +66-2033-9647