Stock Exchange of Thailand
The Stock Exchange of Thailand (SET) is Thailand's primary stock exchange in Thailand. It was established in 1974, and is supervised by a Board of Governors. The Board consists of 11 Governors, with five appointed by the Securities and Exchange Commission (SEC), five elected by the SET members companies, and a full time president, who is appointed by the Board and serves as an ex-officio Board member.
The SET considers applications from companies requesting listing on the Exchange, including ensuring applicants meet requirements as well as submit the correct documentation. It has also established information disclosure requirements for listed companies and monitors all trading activities involving listed securities. The Exchange's regulations strictly prohibit insider trading and price manipulation of listed securities.
Net Clearing and book entry settlement are services handled by the Thailand Securities Depository Co., Ltd. (TSD), a subsidiary of the SET.
The SET lists a wide range of equity and debt instruments. Listed securities include ordinary shares, preferred shares, bonds and debentures, warrants and covered warrants, and unit trusts.
A. SET Members
Currently, the SET has 50 broker seats. At present, there are 27 active members at the Exchange. Member companies must be securities companies permitted by the Ministry of Finance to conduct securities business in the category of securities brokerage.
B. SET Listed Companies
All listed companies are publicly limited firms. Becoming a listed company not only allows a firm to gain access to development capital, but also allows shareholders to benefit from investment liquidity and enjoy dividend income as a result of revenue or profit growth at the companies they invest in.
C. Foreign Shareholding Limits
The Thai Cabinet recently approved a new draft law that relaxes foreign ownership limits in certain industries. It aim is to allow foreign investors to hold more majority stakes without limit in Thai companies, depending on certain criteria, that may apply to some sectors or industries.
Under earlier legal changes, the limits on the foreign ownership of securities companies have been relaxed, depending on a number of conditions. These included any new foreign owner investing at least 500 million Baht in the securities company. Such amount of that money will include funds brought into the securities company within the period of one year prior to the date of applying for permission from the Ministry of Commerce. It must also be maintained for a minimum period of three years. Any foreign managing director must also reside in Thailand at least 60 days a year.
D. The Securities and Exchange Commission
In March 1992, the Securities and Exchange Act established a Securities and Exchange Commission (SEC) in Thailand. The SEC plays a supervisory and policy formulation role in the Thai capital market. However, it does not directly regulate the SET's operations, other than to give approval to the SET's major regulations not concerned with day-to-day operations.
E. Market for Alternative Investment (MAI)
In line with the Thai Government policy to support the development of small and medium-sized enterprises, in June 1999, the SET established a new secondary market for trading SME shares, or the Market for Alternative Investment.
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