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SEC public hearing on proposed amendments and draft regulations regarding offer for sale of newly issued bonds of foreign entities

Thursday 7 December 2023 | No. 235 / 2023

Bangkok, 7 December 2023 – The Securities and Exchange Commission (SEC) is seeking public comments on proposed amendments and draft regulations governing approval of offer for sale of newly issued bonds denominated in Thai baht of foreign entities (baht bond). The proposal aims to streamline the application process and revise relevant criteria to better suit the level of foreign entity risk.

Currently, the existing regulations require that the foreign issuer of baht bonds comply with the approval and disclosure rules in the same manner as other types of bonds. Additionally, to issue and offer for sale of baht bonds, the foreign entity issuer must obtain an approval and adhere to the obligations specified by the Ministry of Finance. However, given the changing contexts and landscape of the bond market, the relevant ministerial regulations would be repealed and instead the foreign issuer of baht bonds would be required to file an application for approval of offer for sale of baht bonds with the SEC directly in harmony with the requirements imposed on other types of bonds.

The key points of the proposed amendments to the relevant regulations are as follows:

(1) To streamline the application process, requiring the foreign issuer to file an application with the SEC directly without the need to obtain a prior approval from the Ministry of Finance;

(2) To require the foreign issuer of baht bonds to (i) obtain an issue rating not lower than investment grade* from an international credit rating agency established under foreign law, (ii) appoint the bondholder representative, and (iii) register the bonds with the Thai Bond Market Association (ThaiBMA) in all cases. In this regard, the SEC would grant a temporary exemption to the roll-over of outstanding non-investment grade bonds** to mitigate potential impacts on issuers, investors, and the bond market's confidence;

(3) To align the criteria for issuance and offer for sale of foreign currency-denominated bonds (FX Bonds) by foreign businesses in Thailand with the proposed amendments for baht bonds.

For further details of this public hearing, please visit https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=956. Stakeholders and interested parties are welcome to submit comments and suggestions via the website or email: debt@sec.or.th. The public hearing ends on 20 December 2023.

________________________

Remarks:

* The criteria mandate credit rating assignment by international CRAs established under foreign law, and the bonds must receive an issue rating not lower than the investment-grade level. This does not apply to private placements (Private Placement: PP10).

** The existing issuers with outstanding debt securities as of 31 December 2023.

NEWS

Securities and Exchange Commission

Corporate Communication and Investor Service Department

Tel. (66)2033-9502-5 E-mail: press@sec.or.th

No. 235 / 2023	Thursday 7 December 2023
SEC public hearing on proposed amendments and draft regulations regarding offer for sale of newly issued bonds of foreign entities
Bangkok, 7 December 2023 – The Securities and Exchange Commission (SEC) is seeking public comments on proposed amendments and draft regulations governing approval of offer for sale of newly issued bonds denominated in Thai baht of foreign entities (baht bond). The proposal aims to streamline the application process and revise relevant criteria to better suit the level of foreign entity risk.
Currently, the existing regulations require that the foreign issuer of baht bonds comply with the approval and disclosure rules in the same manner as other types of bonds. Additionally, to issue and offer for sale of baht bonds, the foreign entity issuer must obtain an approval and adhere to the obligations specified by the Ministry of Finance. However, given the changing contexts and landscape of the bond market, the relevant ministerial regulations would be repealed and instead the foreign issuer of baht bonds would be required to file an application for approval of offer for sale of baht bonds with the SEC directly in harmony with the requirements imposed on other types of bonds. The key points of the proposed amendments to the relevant regulations are as follows: (1) To streamline the application process, requiring the foreign issuer to file an application with the SEC directly without the need to obtain a prior approval from the Ministry of Finance; (2) To require the foreign issuer of baht bonds to (i) obtain an issue rating not lower than investment grade* from an international credit rating agency established under foreign law, (ii) appoint the bondholder representative, and (iii) register the bonds with the Thai Bond Market Association (ThaiBMA) in all cases. In this regard, the SEC would grant a temporary exemption to the roll-over of outstanding non-investment grade bonds** to mitigate potential impacts on issuers, investors, and the bond market's confidence; (3) To align the criteria for issuance and offer for sale of foreign currency-denominated bonds (FX Bonds) by foreign businesses in Thailand with the proposed amendments for baht bonds. For further details of this public hearing, please visit https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=956. Stakeholders and interested parties are welcome to submit comments and suggestions via the website or email: debt@sec.or.th. The public hearing ends on 20 December 2023. ________________________ Remarks: * The criteria mandate credit rating assignment by international CRAs established under foreign law, and the bonds must receive an issue rating not lower than the investment-grade level. This does not apply to private placements (Private Placement: PP10). ** The existing issuers with outstanding debt securities as of 31 December 2023.

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