Issuing secured bonds and appointing a qualified bondholders’ representative can enhance investor protection, especially in the event of a default in debt securities crowdfunding. However, the issuance of secured bonds by companies through crowdfunding has remained relatively low due to the constraints in finding suitable bondholders’ representatives and the potential incompatibility of the existing regulations regarding the qualifications of bondholders’ representatives, which have been in place since 2009 amid the changing circumstances.

The SEC is therefore conducting the public hearing on the proposed amendments to the qualifications of bondholders’ representatives, as approved by the recent Capital Market Supervisory Board Meeting. The key points of the amendments are summarized below:  

            (1)  Allowing funding portals to register as a bondholders’ representative, limited to the bonds issued through their platform, to support the issuance of secured bonds via crowdfunding;  

          (2)  Requiring bondholders’ representatives to have paid-up registered capital of at least 25 million baht, which is comparable to securities companies maintaining clients' assets in custody. Additionally, funding portals acting as a bondholders’ representative are required to meet and maintain proper financial qualifications; and   

        (3)  Allowing securities companies licensed to operate any of the following types of securities businesses – namely (a) securities brokerage, dealing, or underwriting, regardless of the types of securities, or (b) securities brokerage, dealing, or underwriting of debt securities and Sukuk – to register as a bondholders’ representative. This is to ensure that the categorization of securities aligns more closely with the roles and responsibilities of bondholders’ representatives.

The consultation paper is available at https://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=981 and https://law.go.th/.

Stakeholders and interested parties are welcome to submit comments and suggestions through the SEC’s website or email: jaruwan@sec.or.th or wipawee@sec.or.th. The public hearing ends on 25 April 2024.   

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