The Securities and Exchange Commission (SEC) has revised the qualification criteria of bond representatives, requiring them to have a registered capital of at least 25 million baht and allowing crowdfunding firms to act as bond representatives in addition to other financial institutions.
The adjustment, which came into effect on Aug 16, is aimed at offering better protection to investors in the current business environment, the regulator said in statement.
According to the revised criteria, only securities firms that have been licensed to conduct business in the categories of securities brokerage, trading and distribution, which can provide services related to debt instruments and sukuk (sharia-compliant) bonds, can act as bondholder representatives.
As well, crowdfunding service providers can now act as bondholder representatives, but this is limited to bonds that they are providing services for in order to support the issuance of secured crowdfunded bonds, the statement noted.
Finally, bondholder representatives must have a paid-up registered capital of 25 million baht or more. That is comparable to a securities company that has custody of customer assets.
The announcement of the criteria has been published in the Government Gazette and became effective from Aug 16, it added.
According to the Thai Bond Market Association, the value of bonds with defaulted and deferred problems stood at 19.9 billion baht in the first six months of 2024.
Defaulted bonds were worth 1.1 billion baht, involving three issuers including tourism company P.P. Holiday (PPH), small real estate firm Cissa Group (CISSA) and property developer IRIS Group.
All three bond issuers were small companies whose liquidity problems had accumulated since the outbreak of the Covid-19 pandemic.
The value of deferred bonds stood at 18.8 billion baht in the first half, higher than the value of the whole of last year, which reached 12.4 billion baht.
Among the nine bond issuers that were deferred was Italian-Thai Development (ITD), which experienced liquidity problems and requested a payment extension of all five of its debenture issues, totalling 14.4 billion baht.
In August, renewable energy company Energy Absolute (EA) requested its bondholders postpone the repayment of its two series of bonds worth 5.5 billion baht.