Supervision on issuance of equity
|Initial Public Offering (IPO)
||Public Offering (PO)
|| Private Placement (PP)|
|1. Procedures on the offering for sale of securities
|2. Approval criteria
|2.1 Approval criteria for IPO
||2.2 Approval criteria for PO|
|3. Information disclosure prior to offering for sale of securities
|4. Information disclosure and after sell duties
Relevant regulation: the Notification of the Capital Market Supervisory Board No. TorChor. 28/2551 Re: Application for Approval and Granting of Approval for Sale of Newly Issued Shares (codified).
1. Procedure for initial public offering (IPO) and public offering (PO)
2. Requirements for IPO of non-listed companies
An applicant for issuance for sale of securities to the public shall be a public limited company (Section 33 of the Securities and Exchange Act of 1992) and has the qualifications prescribed by the regulations on corporate governance and other requirements, as follows:
- Protection of investors’ rights and fair treatment to shareholders
o Having a clear and fair structure of shareholding;
o Showing power of control and shareholders’ interest transparently;
o Persons with conflicts of interest holding not more than 10 percent of shares in subsidiaries or associated companies unless it can be proven that the structure of such shareholding is for the best interest of the issuing company;
o Not having a cross-shareholding structure among the applicant, major shareholders and associated companies unless allowed by the SEC;
o The board of directors, executives and major shareholders not having conflicts of interest unless a reliable management mechanism is put in place for the best interest of the company and the shareholders;
o Not having reasonable grounds to suspect that the company’s management fails to protect the rights of the shareholders or treat them fairly.
- Roles, duties and responsibilities of directors, executives and controlling persons
o Understanding their roles, duties and responsibilities to the shareholders and demonstrating the ability to perform accordingly;
o Having sufficient checks and balances between the board of directors and the management, for example:
- At least one-third of the board of directors, in any event not less than three persons, shall be independent directors;
- The Audit Committee shall comprise at least three independent directors who have qualifications and duties similar to those specified by the Stock Exchange of Thailand regulations, are experienced in auditing financial statements and capable of performing other duties of the Audit Committee.
- In case the board of directors authorizes the management to act on its behalf:
- The authorization must be in writing or clearly recorded as a resolution of the board in the minutes of the company’s meeting;
- The scope of the power of attorney must be clearly specified.
○ The board of directors and the management shall not have prohibited characteristics and their names shall be on the SEC database of directors and executives of securities issuing companie in compliance with the disclosure rules.
- Disclosure of information
o The disclosed information shall be sufficient, and not misleading, for investment decision-making;
o The company’s financial statements and the consolidated financial statements for the latest financial year and the latest quarter shall be accurate and reliable by way of:
- Complying with the accounting standards for public limited companies (including limited company subsidiaries) and the rules prescribed under Section 56 of the Securities and Exchange Act of 1992;
- Being audited or reviewed by an approved auditor. (List of the SEC-approved auditors);
- The report of the auditor shall not have the following characteristics:
o The auditor not expressing an opinion on the financial statements or expressing an opinion that they are inaccurate;
o The auditor expressing a qualified opinion that any significant transaction is incompliance with accounting standards;
o The auditor being of the opinion that the auditing scope is limited by the company or its executives;
o There is a reasonable ground to suspect the company’s ability to prepare and disclose sufficient information in compliance with the specified rules continuously and reliably.
- Other qualifications
o Not being involved in illegal business;
o Not having a record of violating or failing to comply with the offering rules in respect of significant matters;
o Having a clear resolution to increase capital within one year prior to the date of filing the application.
a. Requirements for PO of listed companies
- Being a listed company on the SET or the mai;
- Not being in violation of Section 56, Section 57, Section 58 or Section 199 regarding disclosure of information such as the annual registration statement (Form 56-1) and annual report (Form 56-2) unless granted a waiver;
- Having the same qualifications as IPO.
Conditions and permission period
The issuer shall complete the offering for sales of securities within six months as from the SEC’s approval date but may request a deadline extension. In any event, the permission period shall not exceed 12 months.
3. Pre-offering disclosure of information
4. Post-offering disclosure of information
Summary of information disclosure and post-offering duties
The following is a summary of the disclosure responsibilities of issuing companies, directors, executives and auditors under the Securities and Exchange Act of 1992.