Bangkok--1 Mar--SET
The Stock Exchange of Thailand (SET)’s Board of Governors approved measures to promote the liquidity of listed firms’ securities. SET will work with Investment Banking Club and Association of Securities Companies (ASCO) to advise firms which have inadequate ‘free float’ or distribution of minority shareholders. These companies will have three years to rectify their situations and avoid being transferred to the Non-Performing Group, posted with an SP sign, and being subject to delisting. SET will also remove the ‘Call Market’ trading method, to encourage firms to expedite free float solutions.
The Board’s resolution will make the Thai market more attractive to investors and, most importantly, protect retail shareholders, SET Executive Vice President and Board Secretary Mr. Suthichai Chitvanich stated.
“Boosting listed firms’ liquidity will promote overall market liquidity, enhancing the appeal of the Thai market, and benefiting the companies themselves. SET will coordinate with related organizations to advise firms which have inadequate free float to rectify their situations by, for example, public offerings, par splitting, or issuing stock dividend,” Mr. Suthichai said.
The minority shareholder requirement is that listed firms must have no less than 150 minority shareholders of ordinary shares, holding in aggregate no less than 15% of paid-up capital. Currently, those firms which do not meet this obligation must trade their securities on a call market or single price auction basis. In future, trading on a call market basis will be revoked, and those securities will be traded normally.
SET will enforce the following procedures where companies do not fulfill the free float requirement. After the first year of non-compliance, the Exchange will publish their names. Should the requirement remain unfulfilled for a second year, SET will declare the firms subject to delisting and post an NC (non-compliance) sign on their securities. Furthermore, their securities will be posted with an SP sign and their trading suspended. These companies will have one further year, after being declared subject to delisting, to rectify the problem.
Should non-compliance persist for three years, the companies’ securities will be moved to the NPG (non-performing group) and posted with an SP sign until they meet the requirement. However, if firms have demonstrated a genuine commitment to resolving the free float problem and their securities are still liquid, they may avoid being moved to NPG. SET will keep investors fully informed of these matters.
The measures are subject to approval from the Securities and Exchange Commission (SEC) before coming into effect.
Following SEC’s endorsement, the names of listed firms not meeting the free float requirement for more than one year will be published, but their securities will be traded normally. For those companies which have not met the free float requirement for less than a year, SET will inform them of the consequences of non-compliance and allow them three years from the date of notification to rectify their situation as specified above.
At present, there are 15 companies who have not met the free float requirement for more than a year and are currently traded on a call market basis.
For more information, please contact the Corporate Communications Dept.:
Ladawan Kantawong Tel: 0-2229-2036 / Sarinluck Jitkawong Tel: 0-2229-2037 /
Nattaporn Boonprapa Tel: 0-2229-2049 / Watsamon Saowakhonsathien Tel: 0-2229-2797