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SEC public hearing on proposed amendments to the rules on material transactions and related party transactions of listed companies



Thursday 28 March 2019 | No. 33 / 2019


Bangkok, 28 March 2019 – The SEC is seeking public comments on proposed amendments to the rules governing material transactions (MT) and related party transactions (RPT), including execution of diverse and complex transactions arising from new business practices, and re-definition of relevant terms. The proposed amendments aim to increase clarity and consistency with regard to listed companies’ transactions by taking into account appropriate investor protection and reasonable burdens towards listed companies.

Given the changing economic and business environments, listed companies are increasingly engaged in more diverse and complex transactions; however, the current rules may not cover – or in some cases are not applicable to – certain types of transactions. For example, giving financial assistance to a third party which is not considered a transaction in the normal course of business of listed companies; therefore, shareholders are not involved in the decision making regarding such transaction.

The SEC therefore is proposing to amend the rules governing the execution of material transactions and related party transactions as well as the re-definition of relevant terms to increase clarity and flexibility. In so doing, the SEC refers to international regulatory guidelines and takes into account the appropriateness of local application, the importance of investor protection and the acceptable burdens towards listed companies.

The proposed amendments include (1) change of the transaction size that requires shareholders’ approval, (2) inclusion of financial assistance to the transaction list subject to material transaction rules, (3) repeal of the categorization of related party transactions to subject them to the same rules as much as possible, and (4) re-definition of the term, “major shareholder” based on “the number of the voting shares” instead of “the number of the outstanding shares” to truly reflect the controlling power over business.

The consultation paper is available at www.sec.or.th/hearing. Stakeholders and interested parties are welcome to submit comments through the website, or facsimile: 0-2263-6099, or email: corgov@sec.or.th. The public hearing ends on 27 May 2019.

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Remark: the hearing documents (in Thai language only) are available at https://capital.sec.or.th/webapp/phs/upload/phs1553660337hearing-15-2562.pdf







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