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Amendment of Listing Requirements under the Market Capitalisation Test
June 2021

By Chawaluck Sivayathorn Araneta, Paphichaya Ratanagraisri, Juree Thanompichai

With effect from 19 May 2021, the Stock Exchange of Thailand (the “SET”) has amended the listing criteria in respect of the market capitalisation test with an aim to provide only companies in the targeted industries according to the government’s policy under the national strategy an access to funding from Thai capital markets through its listing on the SET via market capitalisation test. Whilst the requirement on the minimum market capitalisation at Baht 7.5 billion (which shall be calculated as prescribed in the relevant regulation) remains unchanged, certain criteria and requirements required for those companies wishing to apply for listing on the SET via market capitalisation test (the “Applicant”) have been amended as set out below.

Specific industries
To be eligible to apply for listing under the market capitalisation test, the Applicant must have the operating results of not less than 3 years prior to the filing of a listing application to the SET and must operate its business in the specified industries under the relevant notification of the Board of Governor of the SET (the “Specified Industries”), which include (i) 10 targeted industries, and (ii) those in technology and innovation development industries, to which the investment promotion by the Board of Investment (the “BOI”) has been granted. 

Track record and operating results
The criteria for Earning Before Interest and Tax (“EBIT”) in the latest year and accumulated EBIT has been replaced with the new operating results criteria requiring that the Applicant and its financial advisor jointly prove that (i) most of the Applicant’s operating income is derived from the Specified Industries, or (ii) the majority of its assets are involved in the Specified Industries, prior to the filing of an application and at all time until the date of listing approval.
In addition to the above, the Applicant with the BOI incentives lower than level A2, together with its financial advisor, is also required to jointly prove that its operating income in the latest year must not be less than Baht 5 billion, with continuously increase of not less than 20 per cent average growth rate in the last two years. 

Extended silent period
The lock-up requirement in respect of 55 per cent of the paid-up capital following the initial public offering for the strategic shareholders is extended from a period of one year to three years, whereby a sale of not more than 20 per cent is allowed after every six-month period, provided that the first anniversary of the lock-up period has lapsed. 

Disclosure of working capital sufficiency
Apart from disclosure generally required in the registration statement (the “Filing”), the Applicant shall further disclose in the Filing that it has sufficient working capital in the next 12 months from the effective filing date, and after being listed, the Applicant together with its financial advisor are required to disclose the working capital sufficiency by comparing with the information as disclosed in the Filling for four consecutive quarters within due date of financial statements submission. 

Please feel free to contact the authors for further information about the regulations or any related legal matters.

This document is solely intended to provide an update on recent development in Thailand legislation and is not purported to provide a legal opinion, nor a legal advice to any person.

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