Further Regulations on an Initial Public Offering to be listed on the LiVE Exchange: a new secondary market for SMEs and StartupsArticles
In continuation of our previous article, Regulations on an Initial Public Offering to be listed on the LiVE Exchange: a new secondary market for SMEs and Startups, on 14 March 2022, the Stock Exchange of Thailand (“SET”) has issued a regulation supervising the listing of shares on the LiVe Exchange, i.e. Regulations of the Stock Exchange of Thailand Re: Acceptance of Ordinary Shares as Listed Securities on the “LiVE Exchange” B.E 2565 (2022) (“the SET Regulation”), which came into effect as of 31 March 2022.
According to the SET Regulation, the conditions for SET to accept ordinary shares of a public limited company as listed securities traded on the LiVE Exchange are as follows:
A. Characteristics of ordinary shares
Ordinary shares that may be listed on the LiVE Exchange must have the following characteristics:
(1) Its value has been paid-up in full;
(2) The name of the shareholder is specified; and
(3) There are no restrictions on the transfer of such ordinary shares, except for limitations required by law. In such case, such restrictions must be specified in the company's Articles of Association.
B. Qualifications of an applicant
To register its ordinary shares on the LiVE Exchange, an applicant must have the following qualifications:
(1) A public limited company established under Thai law, with one of the following natures of business:
(i) A business that is considered as a medium-sized enterprise or larger; or
(ii) A business that has received investment through venture capital (VC) or private equity (PE) prior to the initial public offering (“IPO”) of newly issued shares.
(2) Permission for the IPO of newly issued shares from the Securities and Exchange Commission (“SEC”) has been granted, and a registration statement and draft prospectus ("filing") has come into force in accordance with the SEC Notification: Notification of the Capital Market Supervisory Board No. TorJor. 71/2564.
(3) All of the business’s executives have passed a preparatory training course to enter the capital market approved by SEC.
(4) SET or a third party approved by SET has been assigned to officiate as a registered securities registrar.
C. Conditions on the submission of an application and the acceptance of ordinary shares to be listed on the LiVE Exchange
(1) An applicant shall apply for registration of all issued ordinary shares.
(2) Prior to the commission of SET (“the commission”) accepting an applicant's ordinary shares as listed securities on the LiVE Exchange, the applicant shall prohibit the forbidden person mentioned below from selling such shares in accordance with the rules prescribed in item D below.
(3) When SET receives complete and accurate documents submitted by the applicant and the commission considers that the applicant and the ordinary shares submitted for registration are qualified under the SET Regulation, the applicant shall sign a listing agreement with SET before the commission accepts such ordinary shares as listed securities on the LiVE Exchange.
(4) After executing a listing agreement, the commission will accept the ordinary shares as listed securities and determine the starting date to trade such listed securities on the LiVE Exchange.
D. Prohibition of executives or shareholders and related persons from selling ordinary shares within the specified period
Regarding the IPO of ordinary shares, the applicant shall prohibit the forbidden person under the SET Regulation from selling their shares in the amount of 55 percent of the paid-up capital after the date upon which the applicant has completed the IPO, for a period of three years from the date upon which the shares are preliminarily traded on the LiVE Exchange.
However, such forbidden person can gradually sell the prohibited shares in the amount of 20 percent of such prohibited shares after one year from the date upon which the applicant's ordinary shares are traded on the LiVE Exchange. Then, after such period of one year, the prohibited shares can be gradually sold in the amount of 20 percent every six months.
According to such prohibition, the applicant shall deposit the ordinary shares of the forbidden person with the securities depository as specified by SET before the commission considers accepting the applicant's ordinary shares for trading on the LiVE Exchange. In addition, in the case where the forbidden person violates said prohibition, the applicant shall proceed to execute such person pay for a fine in the amount equal to the profit from the sale of such ordinary shares and submit such fine to SET within seven days from the date of the violation or the date upon which the applicant becomes aware of such violation.
For more information on regulations of SET with regard to the LiVE Exchange, please visit https://www.set.or.th.
This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact:
 According to Ministerial Regulations Determining Characteristics of Small and Medium Enterprises, B.E. 2562 (2019), Medium-sized enterprises are businesses with the following characteristics:
(1) A business of manufacturing goods with a number of employment exceeding 50 but not more than 200 persons or with an annual income of more than Baht 100,000,000 but not exceeding Baht 500,000,000; or
(2) A service, wholesale or retail business with a number of employment exceeding 30 but not more than 100 persons or with an annual income exceeding Baht 50,000,000 but not more than Baht 300,000,000.
 Please read our previous article for information regarding the conditions for a company to offer its newly issued shares, as well as the procedures to submit the filing.
 Forbidden person(s), in case of the IPO, shall include the following persons:
(i) A person who participate in the applicant’s administration, including:
(a) An applicant’s directors and executives as well as his/her related persons and persons who are related by blood, marital or legal registration with such person, namely father, mother, spouse and children; and
(b) Shareholders holding more than 5 percent of the paid-up capital by including ordinary shares held by their related persons, except for shareholders which are a securities company, life insurance company, insurance company, mutual fund, provident fund, social security fund, pension fund or investment project approved by law, but did not send its representative to take the position of the applicant's executive.
Note: The definition of related person is in accordance with the Notification of the Securities and Exchange Commission No. KorJor. 17/2551 Re: Determination of Definitions in Notifications Regarding Issuance and Offering of Securities
(ii) Other shareholders, in the case where the persons under (i) have a total number of ordinary shares of less than 55 percent of the paid-up capital after the date upon which the applicant has completed the IPO.
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