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June 29, 2026

Thailand Proposes Securities Act Reforms

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Thailand’s Securities and Exchange Commission (SEC) is seeking public input on significant amendments to the Securities and Exchange Act B.E. 2535 (1992) that would address recurring market abuses and eroded investor confidence observed by the SEC. Published on June 24, 2026, the consultation document targets share-pledging disclosure failures, hidden beneficial ownership, and fraudulent transactions by listed companies, all of which are issues that have threatened share prices and market stability across the Thai capital markets. Comments on the proposals are due by July 24, 2026.

Mandatory Disclosure of Short Sales and Share Pledges

The draft amendments introduce new reporting obligations for both short sales and share pledges. Persons who sell listed securities without having such securities in their possession (“short sales”) must comply with rules prescribed by the Capital Market Supervisory Board, ensuring standardized practices and preventing risks from such transactions. Major shareholders who pledge or encumber their shares in significant amounts must report those arrangements to the SEC, which may then disclose the information to the public.

These amendments directly respond to recent market abuses, including short selling without proper safeguards and instances where directors or major shareholders have pledged large share blocks without disclosure to investors, only to have those shares forcibly sold when collateral was called, causing dramatic share price declines and disrupting ownership structures and market stability.

Reportable transactions for share pledges include the following:

  • Shares used as margin account collateral
  • Shares pledged as loan security, with immediate transfer upon default
  • Shares formally pledged under the Civil and Commercial Code or registered with the Thailand Securities Depository

Failure to report share pledges triggers criminal penalties, as does failure to comply with short sale requirements. By requiring advance disclosure and standardized short sale procedures, the SEC aims to enable investors to assess ownership stability and default risk before share prices collapse, while ensuring fair and transparent trading in the Thai capital markets.

Unmasking Beneficial Owners

The amendments require foreign service providers (including foreign custodians) to report the identity of beneficial owners of Thai-listed securities to the SEC. Entities that are not the true beneficial owners must disclose the actual holders when requested by these foreign providers. This mechanism supports faster enforcement against concealed controlling persons and helps prevent manipulation and takeover schemes masked by offshore structures.

This requirement may significantly affect foreign service providers, particularly regarding their internal rules and regulations. Further discussions among relevant stakeholders will be necessary to address potential conflicts that may arise.

SEC Authority to Freeze Transactions and Assets

In a major expansion of regulatory power, the draft contemplates granting the SEC, upon approval from the SEC board, the authority to suspend transactions made by listed companies or securities firms for up to 60 business days when a proposed transaction appears likely to unfairly exploit or cause serious harm to investors or the public interest. This preventive measure comes in response to past fraudulent transactions involving listed companies that inflicted widespread investor losses, and is designed to allow the regulator to investigate and block harmful deals before damage spreads. However, this broad authority raises significant concerns. If exercised without carefully defined parameters, it may create market uncertainty and adversely affect legitimate business transactions. The extent and scope of this suspension power therefore warrant careful consideration to balance investor protection with commercial predictability.

The amendments also clarify the SEC’s authority to release seized or frozen assets needed for a violator’s ordinary business operations, enabling companies under investigation to continue operating. The SEC may delegate to third parties the process of considering such a release to reduce the administrative burden and expedite release decisions.

Next Steps

Stakeholders may submit comments to the SEC by July 24, 2026, at [email protected]. Listed companies, major shareholders, brokers, and foreign service providers should review their current practices and assess compliance obligations under the proposed rules. Companies planning significant transactions should also evaluate whether the new suspension authority could affect deal timelines.

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