Thai SEC Proposes to Amend the Takeover Rules

The Thai Takeover framework is set for a significant update as the Securities and Exchange Commission (the "SEC") is initiating a public hearing on a proposed amendment to the Thai takeover rules, which govern acquisitions of securities in companies listed on the Stock Exchange of Thailand ("SET"). The key components of this proposed amendment, as outlined in the public hearing document released by the SEC on 1 November 2024, seek to enhance regulatory clarity, align with international standards, and reduce the burden of compliance on the private sector.

1. Introduction and Summary of Key Points

Since 2011, the Notification of the Capital Market Advisory Board No. TorJor. 12/2554 Re: Rules, Conditions and Procedures for the Acquisition of the Securities for Business Takeovers (as amended) (“Takeover Rules”), issued under the Securities and Exchange Act B.E. 2535 (1992) (as amended) (“Securities and Exchange Act”), has served as the primary regulation governing acquisitions of securities in companies listed on the SET. Over the years, the SEC has identified challenges in enforcing the Takeover Rules, conducted public hearings to gather feedback from relevant stakeholders, and subsequently updated the Takeover Rules as needed. This new proposed amendment seeks to enhance clarity, align the Takeover Rules with evolving market dynamics and international standards, and reduce the burden of compliance on the private sector. 

In this newsletter, we will examine the rationale behind and key concepts underlying the proposed amendment to the Takeover Rules, as outlined in Public Hearing Document No. AorJorTor-2. 47/2567 Re: Principles for Amending the Rules for the Acquisition of the Securities for Business Takeover (“Public Hearing Document”), which was published by the SEC on 1 November 2024. 

It is important to note that the proposed amendment to the Takeover Rules remains in the preliminary stages, and the SEC currently is focused on gathering feedback on the amendment's core principles. Consequently, the information provided by the SEC in the Public Hearing Document is subject to further revision. Stakeholders are advised to monitor future developments closely. 

The following are the key topics addressed in the proposed amendment to the Takeover Rules. 

• Amendment to criteria regarding the obligations to undertake a tender offer
  The proposed amendment aims to resolve discrepancies between the obligation to undertake a tender offer and to the reporting requirements for the acquisition and disposal of securities under the Securities and Exchange Act. Particularly, it aims to address existing inconsistencies, reduce confusion, and alleviate the burden of compliance on the private sector.  
• Introduction of new exemptions from the obligation to undertake a tender offer
  The SEC proposes additional criteria for obtaining a waiver of the obligation to undertake a tender offer. Examples include situations in which compliance with other laws is required, where there is no intent to control the business, support for business rehabilitation, restructuring of shareholding within the same ultimate controlling entity/entities without altering control over the business, and situations related to the exercise of rights under a preferential public offering (PPO) based on existing shareholding. 
• Amendment to the mechanisms for determining offer prices
  The proposed amendment introduces new mechanisms to determine offer prices in situations involving the chain principle and where shares are acquired without compensation, aiming to align with international standards and to enhance clarity. 
• Amendment to the general duties/conditions for tender offerors/waiver applicants
  The SEC proposes mandating that tender offerors or waiver applicants ensure compliance with all relevant terms and conditions by relevant persons and/or concerted parties. 
• Amendment to the duties/conditions for tender offerors/waiver applicants in the event of Partial Tender Offers (PTOs)
  The SEC proposes introducing conditions for obtaining a waiver of the obligation to undertake a partial tender offer (PTO), along with post-partial tender offer obligations, to cover related persons’ and/or concert parties’ obligations. 
• Amendment to the details of the whitewash waiver
  The proposed amendment is expected to broaden the applicability of whitewash waivers to include preferential public offerings (PPO) and to provide greater clarity in the case of rights offerings (RO) and private placements (PP). 
• Amendment to the whitewash waiver form (Form 247-7)
  The SEC proposes to update Form 247-7 to eliminate the obligation to disclose highly detailed personal data, to bring the form in line with the requirements of the Personal Data Protection Act B.E. 2562 (2019). 

2. Tentative Timeline 

According to officials from the SEC, the proposed amendment to the Takeover Rules is expected to be published in the government gazette during the second quarter of 2025 and to become effective six months after its publication, likely at the beginning of 2026. This six-month transition period is intended to allow relevant stakeholders, including investors, practitioners, and the private sector, adequate time to prepare for implementation of the amended rules, due to the significant impact of the amendment.  

For ease of reference, the following chart summarizes the relevant processes in, and the tentative timeline for issuance of, the amended Takeover Rules. 

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