The Stock Exchange of Thailand - Simplified Regulations

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Summary

In order to increase investors’ benefits protection measures, SET issues regulation related to "C" (caution) sign posting on listed securities to warn investors that there are circumstances that may affect listed companies financial position and business operation. The securities under C sign must be purchased via cash balance account only.

The measure comes into an effect from July 2, 2018 onwards. However, equity and auditor’s report consideration process will be started from the quarterly financial statements ended June 30, 2018 onwards. The cause and details of C sign posting are as follows.

1. “C” sign posting for companies with financial position, financial statement or business type risk.

Subject	Details
Subject	“C” Sign posting	“C” Sign lifting
Financial Position	The shareholders’ equity is less than 50% of paid-up capital¹. The financial institutions, securities companies, life insurance or non-life insurance companies have been publicly ordered by its regulator to rectify financial position or operating result by temporarily discontinuing their partial operation or business expansion which are significant orders to the financial status and operating results. The company or debtor or regulator has submitted the company’s rehabilitation petition and the court has accepted the petition. The company has been filed for bankruptcy by the debtors and the court has accepted the petition.	The shareholders’ equity is equal to 50% or more of paid-up capital¹. The company is able to show that the company has resolved its financial position or operating result as ordered by such regulator. The court has dismissed or withdrawn the petition. The court has dismissed the filed bankruptcy or the debtor has withdrawn the plaint according to the bankruptcy law.
Financial statements	The auditor’s report contains the issuance of a disclaimer opinion on the financial statements due to the limitation of reviewing or auditing scope by the company or the committee or the executives or The SEC has ordered the company to rectify financial statements or arrange a special audit.	The company has submitted the financial statement that does not contain such characteristics. The company has submitted the rectified financial statements or special audit as ordered by the SEC.
Business type	The listed company that has total assets or almost all of its total assets in the form of cash or short-term assets (Cash Company).	The company has resolved the status of cash company within specified deadline.

Remarks

¹	The paid-up capital means the paid-up capital deducting the discounts on share capital and the discounts from business restructuring in accordance with the calculating method stipulated by the Exchange. In any case, the paid-up capital after those deductions shall be greater than zero.

SET has specified the calculation guideline of the measure as follow

Step 1

Calculate shareholders’ equity to paid-up capital deducting the discounts on share capital ratio as follows:

Equity
Paid-up Capital - Discounts on Share Capital

In case the result of the calculation in Step 1 > 50%: Not qualified as “C” measure
In case the result of the calculation in Step 1 < 50%: To calculate Step 2

Step 2

In case the result of the calculation in Step 1 < 50%
To deduct the discounts from business restructuring from the paid-up capital, such as the adjustment of equity interests under reverse takeover, the deficits arising from business combination under common control, among other items, as follows:

Equity
Paid-up Capital - Discounts on Share Capital - Discounts from Business Restructuring

However, the deduction shall not be greater than the current paid-up capital.
In case the result of the calculation in Step 2 > 50%: Not qualified as “C” measure
In case the result of the calculation in Step 2 < 50%: Qualified as “C” measure

2. Listed companies appeared to be in the scope of using “C” (Caution)

The listed company is required to set up a meeting in order to provide information to the investors and concerned persons (Public Presentation) within 15 days since the day that “C” sign is posted by providing of the plan to solve the problems and report on resolving progress to the company’s Board Of Directors (BOD) and Audit Committee to approve. Also, aforementioned plan and progress must be reported through the SET Disclosure System.

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