SEC is holding a public hearing on the proposed amendments to the regulations governing REIT indirect investment. According to the current regulations relating to issuance and offer for sale regarding units of REIT, if indirect investment in real estate is made through shareholding of other companies, REIT must hold not less than 99% of the total sold shares and of the total voting shares in that company. This is to ensure that REIT receives full benefits from invested assets and that REIT can supervise and control subsidiary
companies’ operations to be in compliance with the same rules that apply to REIT direct investment.

However, based on consultation with the private sector, there are necessary reasons why REIT sometimes may not be able to invest indirectly by holding virtually all shares in other companies. SEC is therefore proposing to amend rules on REIT investment to pave the way for REIT to undertake indirect investment in real estate by holding shares in other companies of less than the current threshold of 99%, provided that prescribed conditions are met. Moreover, additional mechanisms to protect REIT rights must be in place, for example, disclosing reasons for partial investment, granting the right of objection on material issues to REIT, having guidelines to resolve conflicts between REIT and investment partners, and providing a statement of opinions on benefits and interests in case of a joint investment.

The consultation paper can be found at http://capital.sec.or.th/webapp/phs/upload/phs1524798535hearing_13_2561.pdf. 

Stakeholders and interested parties are welcome to give comments and suggestions via the SEC website: www.sec.or.th/hearing, or facsimile at 0-2033-9619, or email: weeruna@sec.or.th or yongyut@sec.or.th or leelanar@sec.or.th. The public hearing ends on 28 May 2018.