Stock Exchange of Thailand (SET) is Thailand's primary stock
exchange in Thailand. It was established in 1974, and is
supervised by a Board of Governors. The Board consists of
11 Governors, with five appointed by the Securities and
Exchange Commission (SEC), five elected by the SET members
companies, and a full time president, who is appointed by
the Board and serves as an ex-officio Board member.
SET considers applications from companies requesting listing
on the Exchange, including ensuring applicants meet requirements
as well as submit the correct documentation. It has also
established information disclosure requirements for listed
companies and monitors all trading activities involving
listed securities. The Exchange's regulations strictly prohibit
insider trading and price manipulation of listed securities.
Clearing and book entry settlement are services handled
by the Thailand Securities Depository Co., Ltd. (TSD), a
subsidiary of the SET.
SET lists a wide range of equity and debt instruments. Listed
securities include ordinary shares, preferred shares, bonds
and debentures, warrants and covered warrants, and unit
the SET has 50 broker seats. At present, there are 27 active
members at the Exchange. Member companies must be securities
companies permitted by the Ministry of Finance to conduct
securities business in the category of securities brokerage.
Companies All listed companies are publicly limited firms.
Becoming a listed company not only allows a firm to gain
access to development capital, but also allows shareholders
to benefit from investment liquidity and enjoy dividend
income as a result of revenue or profit growth at the companies
they invest in.
Foreign Shareholding Limits
Thai Cabinet recently approved a new draft law that relaxes
foreign ownership limits in certain industries. Its aim
is to allow foreign investors to hold more majority stakes
without limit in Thai companies, depending on certain criteria,
that may apply to some sectors or industries.
earlier legal changes, the limits on the foreign ownership
of securities companies have been relaxed, depending on
a number of conditions. These included any new foreign owner
investing at least 500 million baht in the securities company.
Such amount of that money will include funds brought into
the securities company within the period of one year prior
to the date of applying for permission from the Ministry
of Commerce. It must also be maintained for a minimum period
of three years. Any foreign managing director must also
reside in Thailand at least 60 days a year.
in Financial Institutions The Ministry of Finance and the
Bank of Thailand have recently announced measures to restore
confidence in the financial sector by requiring commercial
banks and finance companies currently in operation to increase
their capital as a cushion against any potential loss from
institutions are encouraged to take early action so as to
prevent any problem in the future. To facilitate and expedite
financial institutions' capital increase, the Bank of Thailand,
with the approval of the Minister of Finance, has set the
following guidelines for the financial institution's capital
for foreign equity participation in Thai financial institutions
Foreign investors that have sound financial status and high
potential to help increase the efficiency in the management
of the financial institution shall be allowed to hold more
than 49 percent of the share in the 15 commercial banks,
33 finance companies, and 12 credit foncier companies for
a period of 10 years. After 10 years, foreign investors
will not be forced to sell their shares but they may not
purchase any additional shares, unless the amount of foreign
shareholdings is less than 49 percent of total shares. Additional
shares may be acquired to bring foreign shareholdings to
49 percent of total shares. For the holding of shares of
the 58 suspended finance companies, the Financial Sector
Restructuring Agency (FRA) shall follow the guidelines of
the Committee to Supervise the Merger and Acquisition of
Financial Institutions announced on 13 October 1997. The
guideline allows unlimited amount of shareholding by foreign
shareholders up to a period of 10 years. After 10 years,
foreign investors may not purchase any more shares unless
the amount held is less than 49 percent of total shares
in which case additional shares maybe acquired until the
49 percent mark is reached.
guideline shall be the same for foreign investors that are
banks. The foreign bank that already has a full branch or
a Bangkok International Banking Facility will be allowed
to continue their existing operation. However, the authorities
reserve the right not to allow a foreign bank that has more
than 49 percent stake in a Thai bank to have an additional
full branch in Thailand.
The Securities and Exchange Commission
March 1992, the Securities and Exchange Act established
a Securities and Exchange Commission (SEC) in Thailand.
The SEC plays a supervisory and policy formulation role
in the Thai capital market. However, it does not directly
regulate the SET's operations, other than to give approval
to the SET's major regulations not concerned with day-to-day
Market for Alternative Investment (MAI)
line with the Thai Government policy to support the development
of small and medium-sized enterprises, in June 1999, the
SET established a new secondary market for trading SME shares,
or the Market for Alternative Investment.