Thailand's SEC to Greenlight Appointment of Foreign Custodians for DR Issuance

Thailand's Securities and Exchange Commission (SEC Thailand) has opened a consultation on rule amendments that will allow global custodians to be appointed for DR (depository receipt) issuance.

Under revised guidelines, DR issuers can directly appoint a global custodian or foreign agent to hold overseas securities, thereby improving efficiency and flexibility and reducing operating costs and other barriers to issuance.

Foreign custodians can only be appointed if they have appropriate custody, audit and supervision systems in place, the SEC Thailand said. DR issuers will be required to disclose information regarding the selection of foreign custodians when they apply for the SEC Thailand's authorisation to issue depositary receipts.

The SEC Thailand has been promoting DR issuance to increase the options for investors looking to diversify their investments.

Last year the SEC Thailand revised its guidelines to allow DR issuers to offer such products through direct stock exchange listings and expand the types of underlying securities allowed in DR issuance.

Following further revisions earlier this year, the SEC Thailand also allows fractional trading in depositary receipts.

Source: Regulation Asia