The Securities and Exchange Commission (SEC) plans to implement a revised regulation on issuing and selling debt securities on April 1 in a bid to protect investors' interests and limit systemic risks.
"The SEC has improved its guidelines by taking into account the balance between ease of access to funds and the ability of business operators to raise funds, as well as protecting investors of different types at an appropriate level," said secretary-general Rapee Sucharitakul.
"There has been an increase in the standard of intermediary performance to ensure the balance between the benefits of investors and issuers."
Some of the amendments include limiting the sale of bills of exchange to private placement and institutional investors as opposed to raising funds from a wide spectrum.
The amendments also cover separating oversight of major investors from institutional investors to protect the former and ensure that they have the correct information to make investment decisions.
A plan to increase investor protection mechanisms has also been revised, whereby the sale of debentures to major investors must have a debenture holder representative, while information showing greater debt repayment ability will also be required.
Regarding the sale of debt securities through private placement, the amendment is designed to only allow offers to investors who are related to the issuers, institutional investors or major investors.
In cases where a private placement offer is made to non-connected major investors, the issuer must make the offer through intermediaries.
The amendment also increases the duties of intermediaries, requiring them to screen debt securities before issuing them and clearly delineate the product from the sales agency.
The seller must also understand the nature and risks of the debt instruments to properly advise clients, while also disclosing information via the fact sheet format.
Ten companies defaulted on bond payments during 2016-17, according to the SEC.
Seven were SET-listed firms: Energy Earth Plc, Rich Asia Corporation Plc, KC Property Plc, Inter Far East Energy Corporation, Nation Multimedia Group Plc (NMG), Solartron Plc (SOLAR) and E For L Aim Plc (EFORL).
The three non-listed companies were YMP Press & Dies Thailand Co Ltd, WCI Holding Co Ltd, and BRP Engineering Co Ltd.
NMG, SOLAR and EFORL have resolved their debts, while the other seven remain in the resolution process.