The Securities and Exchange Commission (SEC) is planning to post warning signs on current securities that cannot comply with the regulations for being a listed company from April 1, and is also preparing to adjust its listing rules to raise the quality of listed companies early next year.
Secretary-general Pornanong Budsaratragoon said the SEC's board agreed with the Stock Exchange of Thailand's (SET) proposal to improve the bourse's listing criteria to enhance its screening of companies to be listed on the Thai bourse and oversee the existing listed firms.
Under a strategy to strengthen trust and confidence in the capital market, the SEC aims to raise the quality of listed companies and the performance of personnel related to listed companies' supervision, based on the proposal from the SET.
As part of the preventive measures, the SET proposed improving the qualifications of companies to be listed on the main bourse and the Market for Alternative Investment (MAI) in regards to their financial status and operating performance.
For example, companies to be listed on the SET must have a profit in the previous year of 75 million baht, up from 30 million baht under the existing requirement, and cumulative profits for three years of 125 million baht, from the current 50 million baht.
For the MAI, companies must have a profit of 25 million baht in the past year, up from the current 10 million baht, and two-year cumulative profit of 40 million baht, which is not required under the current rule.
Shareholders' equity after an initial public offering (IPO) would be lifted to 800 million baht for listing on the SET, from 300 million baht now, and double to 100 million baht from 50 million baht for the MAI.
Paid-up capital after the IPO would decrease to 100 million baht from 300 million baht at present for SET-listed companies, and 50 million baht for the MAI. The free float requirement for the SET would be set at 30% of total paid-up capital with minority shareholders of up to 1,000, which currently forms no requirement. For MAI-listed shares, free float would also be 30%, with up to 300 minority shareholders.
The SEC will also improve backdoor listing rules and criteria for stocks to resume trading criteria, and the level of investor notifications and the delisting of companies would be increased.
The criteria for disclosing names of shareholders and unitholders for listed companies, trusts, and funds would be strengthened. Disclosing the names of shareholders would be required from the beginning of next month, and criteria about backdoor listing and investor notifications would be effective from April 1.
Besides, the SEC has considered the ratio of program trading that is most suitable for the SET to make trading fairer for all parties involved. Currently, program trading accounts for 30-40% of average daily trading and the new requirement is expected to be implemented in early March.
The SEC is also working with the SET to study guidelines for issuing auto halt criteria or temporarily suspending securities trading for stocks with irregular trading. The regulations will be issued and put into practice by 2024, Ms Pornanong added.