The SEC has proposed amendments to regulations governing DRs, Thai ETFs’ investment in foreign L&I ETFs, and margin lending for L&I ETFs. Subsequently, public hearings on the principles of the proposed amendments were conducted during June–July 2026 and in September 2026. Most respondents agreed with the proposed principles.

The SEC has therefore prepared draft notifications in accordance with the proposed principles and is seeking public comments on the drafts. The key provisions are as follows:

1. Amendments to DR regulations

1) Enhancing the quality of foreign underlying securities (UL) by:

- Revising the criteria for foreign ETFs eligible to serve as UL for DRs to exclude foreign L&I ETFs and foreign crypto ETFs; and

- Expanding eligible UL from common shares of companies in the Greater Mekong Subregion countries to common shares of companies in ASEAN countries instead. Such common shares must have an average market capitalization of at least 75 billion baht over the preceding 15 consecutive business days. This is intended to support investment in ASEAN countries and help ensure that the underlying shares of DRs are of a more appropriate size and liquidity.

2) Enhancing the transparency of DR transactions by:

- Improving the operational systems supporting DR issuance and offering by requiring DR issuers to establish systems for the monitoring and verification of UL, comprising: (1) a system for the verification of UL before each DR issuance; (2) a system for the monitoring and verification of UL to ensure that the amount of UL held is sufficient to cover all DRs that have been sold and not yet redeemed; and (3) a system for monitoring and preventing the UL from being pledged, used as collateral, encumbered, or otherwise used to obtain any benefit. These requirements are intended to ensure that DR issuers hold sufficient UL to fully cover each DR issuance and that investors receive the benefits arising from the UL held by the DR issuers; and

- Adding requirements for DR issuers to report and retain documents relating to UL to support the monitoring of their compliance with the applicable rules.

3) Revising the application process for the issuance and offering of DRs by adopting the shelf issuer and shelf filing approaches, similar to those applicable to derivative warrants (DWs). Under the Shelf issuer approach, a DR issuer that meets the prescribed qualification requirements would be approved to issue and offer DRs for a one-year period corresponding to its annual report submission cycle, with no limit on the number of offerings or the offering value. For each DR issuance and offering, the DR issuer would be required to file a registration statement and draft prospectus (the filing) for each project (shelf filing). The proposed amendments would also revise the application fees for the issuance and offering of DRs in line with the revised application process and provide greater flexibility regarding the persons authorized to certify the accuracy of the information in the filing.

2. Amendments to regulations on investment by Thai ETFs

Thai ETFs would be permitted to invest in foreign L&I ETFs solely for portfolio management purposes, provided that the details of such investments are disclosed in their investment policies. In addition, Thai ETFs structured as feeder funds or fund of funds must not have an investment policy or investment strategy focused on investing in foreign L&I ETFs.

3. Amendments to margin loan regulations for L&I ETFs

Securities companies would be required to set Initial Margin (IM) rates that reflect the higher risks of L&I ETFs compared with other products, taking the leverage factors of L&I ETFs into account when determining the IM rates. They would also be required to establish measures to prevent concentration at both the individual customer and margin loan portfolio levels of securities companies, and to appropriately monitor debtor quality and concentration. These requirements are intended to mitigate risks to investors and securities companies arising from market volatility and forced sales of collateral.

The consultation paper is available on the SEC website at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=1242 and on the Legal Hub at https://law.go.th/listeningDetail?survey_id=ODc0OERHQV9MQVdfRlJPTlRFTkQ= Stakeholders and interested parties are invited to submit comments via either website or by email to poontarika@sec.or.th, jurairat.s@sec.or.th, or korakot@sec.or.th (for the draft notification on DR); thanunya@sec.or.th or pattarav@sec.or.th (for the draft notification on Thai ETFs’ investment); or benja@sec.or.th or kunpatu@sec.or.th (for the draft notification on margin lending for L&I ETFs). The public hearing is open until 9 December 2026.