Regulations and Conditions for Listing on the Stock Exchange of Thailand (Updated Year 2025)

The Stock Exchange of Thailand (SET) has introduced new criteria for listing, aimed at enhancing the quality of listed companies and strengthening the Thai capital market. These criteria include increasing the proportion of shares held by minority shareholders and screening companies with stable financial standings. Meanwhile, the Market for Alternative Investment (mai) maintains flexible criteria for small and medium-sized enterprises to support growth across all levels.

Objectives of the New Listing Criteria

The listing process on the stock exchange plays a crucial role in the country’s economic and capital market development. It serves as an important channel for long-term capital raising for companies, enhances business opportunities, and builds a credible image. Moreover, it provides retail investors with a broader range of investment options.

The main objectives of the new listing criteria improvements are as follows:

1. Enhancing the Quality of Listed Companies: The new criteria require companies to demonstrate stronger financial health, with increased shareholder equity and net profit thresholds. This ensures that listed companies have financial stability and long-term growth potential.

2. Increasing Market Liquidity: By raising the proportion of shares distributed to retail shareholders to 20-30% of paid-up capital, the goal is to boost the volume of shares in circulation, which in turn enhances market liquidity and trading activity.

3. Enhancing the Credibility of Thailand’s Capital Market: The presence of higher-quality listed companies will foster confidence among both domestic and international investors, making the Thai capital market more attractive on a global scale.

4. Supporting Sustainable Development: The new criteria emphasize good corporate governance, transparent disclosure, and consideration of social and environmental impacts, aligning with the global trend toward sustainable investment.

5. Balancing Quality Elevation and Access: Although the criteria have become more rigorous, the Stock Exchange still provides opportunities for high-potential small and medium-sized enterprises (SMEs) by allowing access to capital through the Market for Alternative Investment (mai), which maintains more flexible criteria to support growth at all business levels.

These criteria updates reflect the Stock Exchange of Thailand's efforts to develop a stronger, higher-quality, and internationally competitive capital market, while considering the interests of all stakeholders—listed companies, investors, and the broader economy.

Comparison of Listing Criteria for the SET and mai

To better understand the listing requirements for the Stock Exchange of Thailand (SET) and Market for Alternative Investment (mai), the following table summarizes a comparison between the previous criteria (before January 1, 2025) and the new criteria (effective from January 1, 2025):

The Stock Exchange of Thailand (SET)

Market for Alternative Investment (mai)

The number of minority shareholders and the share distribution ratio remain the same, with the SET requiring at least 1,000 minority shareholders and the mai requiring at least 300. The share distribution ratio for both markets is set between 20-30%.

Impacts of Revising the Listing Criteria for Companies Preparing to Go Public

The revision of listing criteria on the Stock Exchange of Thailand (SET) has significant effects on companies preparing for listing and on the overall quality of listed companies, as follows:

Impacts on Companies Preparing for Listing

1. Increased Challenges for Listing: Companies will need to demonstrate stronger financial health, particularly in terms of shareholders’ equity and net profits. This could extend the preparation time required for smaller companies or those with moderate performance.

2. Greater Burden in Share Distribution: The requirement to increase the shareholding ratio of minority shareholders to 20-30% may necessitate more meticulous IPO planning to ensure compliance with the distribution criteria.

3. Enhanced Corporate Governance Requirements: Companies must prioritize the development of effective internal controls and disclosures to align with the new standards.

4. Consideration of Alternative Options: Companies unable to meet the new criteria might consider other funding options, such as listing on the Market for Alternative Investment (mai), which has more flexible requirements, or seeking other sources of funding.

Impacts on the Quality of Listed Companies

1. Overall Quality Improvement: Stricter criteria will help screen for companies with robust financial health and solid performance, leading to a higher overall quality of listed companies.

2. Increased Credibility: A higher quality of listed companies enhances investor confidence, both domestically and internationally, which may, in turn, boost the overall market value.

3. Improved Corporate Governance: The new criteria encourage continuous improvements in corporate governance, benefiting all stakeholders.

4. Increased Market Liquidity: Raising the proportion of shares held by minority shareholders will improve share circulation in the market, enhancing trading liquidity.

5. Potential Short-Term Reduction in New Listings: Due to the stricter criteria, the number of companies able to go public might decrease in the short term. However, in the long run, this will lead to a market with higher-quality listings.

These revisions reflect the Stock Exchange of Thailand's efforts to elevate standards and quality in the Thai capital market. However, there are ongoing challenges in balancing higher quality with providing growth opportunities for potential companies. Continuous monitoring and assessment will be essential to maximize long-term benefits for Thailand’s economy and capital market.

Benefits of Criterion Improvement and Future Trends of the Thai Capital Market

Improving the listing criteria on the Stock Exchange of Thailand offers several benefits and impacts future trends in the Thai capital market as follows:

Benefits of Criterion Improvement:

1. Enhancing the Quality of Listed Companies: Stricter criteria help screen only financially robust companies with solid performance to enter the market, raising the overall quality of listed companies.

2. Increasing the Credibility of the Thai Capital Market: Higher-quality listed companies build confidence among both domestic and international investors, potentially leading to an increase in overall market value.

3. Improving Corporate Governance: New criteria encourage listed companies to continuously develop their governance systems, benefiting all stakeholders.

4. Enhancing Trading Liquidity: Increasing the proportion of shares held by retail investors will boost the volume of circulating shares in the market, leading to improved trading liquidity.

5. Promoting Sustainable Development: The new criteria emphasize good governance, transparent information disclosure, and social and environmental impacts, aligning with the global trend toward sustainable investment.

Future Trends in the Thai Capital Market:

1. Rise in High-Quality Companies: It is expected that more financially strong and well-performing companies will list in the future, increasing the Thai capital market’s attractiveness to investors.

2. Development of the mai Market: The Market for Alternative Investment (mai) may play a more significant role as a funding source for medium-sized and small companies with potential that cannot yet meet SET criteria.

3. Increase in Foreign Investment: Enhancing the quality of listed companies and increasing transparency could attract more foreign investors to the Thai capital market.

4. Development of New Financial Instruments: To meet the needs of investors and companies seeking capital, new financial instruments or funding channels may be developed.

5. Greater Emphasis on Sustainable Investment: The trend of investing with attention to environmental, social, and governance (ESG) factors may increasingly shape the Thai capital market, in line with global investment directions.

6. Company Adaptation to New Criteria: Companies planning to list in the future may need to adjust strategies and operations to align with new criteria, potentially leading to overall business development and improvement.

This criterion improvement reflects the Stock Exchange of Thailand's commitment to elevating the standards and quality of the Thai capital market, which will positively impact the country's long-term economic and investment development. However, continuous monitoring and assessment will be crucial to ensuring these changes deliver the maximum benefits to all stakeholders in the Thai capital market.

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