The Securities and Exchange Commission (SEC) is seeking Bank of Thailand approval to allow local securities to be settled in foreign currencies, starting with the US dollar and China's yuan.
The two currencies are the first as they are in high demand, said Vorapol Socatiyanurak, the SEC's secretary-general.
Multi-currency settlement is considered a crucial move for the Stock Exchange of Thailand to achieve its goal of becoming a regional exchange, beefing up the bourse's competitiveness and luring foreign investors worried about investment risk from foreign exchange fluctuations. However, the central bank said earlier it needed time to consider the issue as the move could affect its monetary policy management.
The SEC signed a memorandum of understanding with the Bank of China late last year to allow Chinese investors to pay in yuan for Thai securities.
The SET has already upgraded its rules and accounting to meet global standards to promote the Thai capital market as a regional trading and fundraising centre, especially for the Greater Mekong Subregion (GMS), he said, adding multi-currency settlement is the only issue that has not been finalised.
In a related development, companies from the GMS such as Laos and China are expected to be the first to seek listing on the Thai stock market.
Last year the SEC board approved regulations on foreign equity offerings, both for primary listings where foreign companies launch initial public offerings (IPOs) and become listed firms on the SET and dual offerings where IPOs are launched in Thailand and other countries simultaneously or in a proximate period.
The regulator also encouraged local state enterprises to raise funds through infrastructure funds, as they do not increase public debt, he said.
The Electricity Generating Authority of Thailand (Egat) is expected to mobilise 20 billion baht in fresh funds by launching an infrastructure fund by the third quarter after 90% of the fund's set-up is completed. The state enterprise appointed Siam Commercial Bank as financial adviser and Krungthai Asset Management as fund manager.
Airports of Thailand also plans to launch an infrastructure fund.