In an effort to advance national policies on environmental, social, and governance ("ESG") issues in accordance with the 20-year National Strategy (2018-2037), Thailand's Securities and Exchange Commission ("SEC") published public hearing documents to seek stakeholders’ feedback from 15 March 2023 to 17 April 2023 ("Public Hearing") on proposed changes that would permit small and medium-sized enterprises ("SMEs") and startups to issue and offer for sale sustainability-themed bonds, which include green bonds, social bonds, sustainability bonds, and sustainability-linked bonds ("Sustainability-themed Bonds"), via PP10-private placement and crowdfunding portals. The Public Hearing also addresses amendments to allow private limited companies to issue Sustainability-themed Bonds in the form of convertible debentures (PP-SME).
Currently, Sustainability-themed Bonds are permitted through certain types of fundraising methods, for example, public offerings (PO), private placements to institutional investors (PP-II), and private placements to high-net-worth investors (PP-HNW). According to SEC, although a total of THB 542,669.78 million was fundraised through the sale of Sustainability-themed Bonds between 2018 and 2023, these bonds were minuscule compared to the entire bond market, and the major issuers were large corporations in certain industries. With these proposed changes, companies of all sizes would have access to more funding opportunities, while integrating ESG considerations into their operations.
The Public Hearing also proposes changes to the rules that require issuers to disclose information prior to and after an offering for sale of Sustainability-themed Bonds. This includes (i) the recognised standards at the applicable international or national level, (ii) the purposes of use of bond proceeds, (iii) the evaluation and selection procedure for eligible projects, (iv) the management of bond proceeds, and (v) the reporting of project progress and reports of external review providers (if applicable). Consequently, bond issuers can promote the sustainability of their products more effectively, and investors can make more informed decisions.
