The Securities and Exchange Commission (SEC) has undertaken regulatory changes concerning companies planning an initial public offering (IPO), as problems have arisen with existing listed firms taking advantage of retail investors.
The capital requirement for listing on the Stock Exchange of Thailand (SET) has been changed to 500 million baht from the previous 300 million, but the paid-up capital requirement will remain at 300 million baht, said SEC deputy secretary–general Prakid Punyashthiti.
Companies planning an IPO must have a positive equity holding by shareholders before launch, Mr Prakid said.
Those listing on the Market for Alternative Investment (MAI) must have paid-up capital of 50 million baht and 100 million baht for equity shareholders, he said, adding that these companies must have a net profit in the latest year of at least 10 million baht.
Newly listed MAI companies are also required to distribute free float shares of at least 25%, the same ratio as for the SET, in order to increase stock circulation in the equity market, Mr Prakid said.
An adjustment will also be made to newly listed MAI companies regarding market capitalisation requirements, with the intent of beefing up the requirement ratio, he said.
Newly listed MAI firms must have a market cap of 1 billion baht or more for every type of business. If the profit threshold is used for listing, such profit must be at least 10 million baht, as opposed to not recording a negative net profit as stipulated in the old regulation.
For newly listed SET companies, the market cap requirement stands at 7.5 billion baht, up from the previous 5 billion baht.
The new listing regulations, which went into effect at the beginning of this year, are aimed at corporate screening and prevent corrupt companies from raising funds from the public.
The regulations will not have any effect on companies that applied for the listing process last year, but will be applied to those who have filed for listing this year.
Mr Prakid said the SEC and the SET have been trying to close loopholes in listing regulations through tougher requirements.
SET-listed Pace Development Plc, a high-end property developer, is the only company to meet its prospectus after listing for five years, he said.
For the MAI, the market regulator has applied tougher listing requirements after many companies reported a loss in net profit right after listing.
"The SEC cannot say if a company is good or bad, but if a company passes the listing regulation then it can undergo share trading," Mr Prakid said. "Investors have to study investment information thoroughly and closely monitor developments [of listed companies] to see whether company executives can meet their business plans or not."
