Thailand’s Securities and Exchange Commission (SEC) has recently amended its regulation on the definition of professional investors, which aids in the issuance of notes to broader private funds by not requiring looking through to the qualifications of the actual investors. However, issuers of notes will still need to take care to comply with existing regulations.

Notes under the Thai Regulatory Framework

The topic of promissory notes was recently in the Thai news after being raised in a no-confidence debate against the government, so this is a fitting time to review the use of notes (in particular bills of exchange and promissory notes) as commonly used financial tools for lending in commercial transactions. These instruments serve as a means of debt settlement and can also be used for fundraising purposes. When using notes, issuers must consider not only tax laws but also fundraising regulations under the Securities and Exchange Act B.E. 2535 (1992).

The SEC has classified notes issued to raise funds from more than 10 persons as securities requiring approval from the SEC and an effective filing of a prospectus, with certain exemptions. These exemptions include instances that are not considered “public fundraising,” such as notes issued:

• For debt settlement,
• For management of cash flow, which is common in commercial transactions,
• As evidence for lending within group companies (intragroup issuance), or
• For lending from financial institutions.

In addition, private placement of notes is another route considered as having been deemed approved (i.e., not requiring an approval process if the required criteria have been met) and may be exempt from filing requirements, depending on the types of investors being offered notes.

Private placement includes offering notes with a minimum face value of THB 10 million for each and maturity not exceeding 270 days from the issue date to professional investors, which will be considered as having been deemed approved, with a filing exemption for foreign professional investors and only minimal disclosure required for Thai professional investors. Professional investors are limited to persons specified in the SEC Notification No. GorJor. 39/2564.

Recent Regulatory Amendment

Prior to the regulatory amendment from the SEC, professional investors included private funds with look-through criteria ensuring that the actual investors were qualified, being financial institutions or having financial status equivalent to ultra-high-net-worth or high-net-worth investors.

The regulatory amendment that came into force May 1, 2025, amended SEC Notification No. GorJor. 39/2564 to simply designate private funds as one of the specified types of professional investors, eliminating the need to scrutinize the actual investors. The SEC considers fund managers as possessing the necessary expertise and a fiduciary duty to manage investments appropriately on behalf of their clients, making additional look-through requirements unnecessary. This can better accommodate issuance of notes to private funds without requiring another layer of scrutiny of funds’ beneficial owners, which can also apply to both domestic and international private funds.

This regulatory change makes funding more accessible for issuers, as private funds alone can be considered professional investors, making them qualified for private placements. This approach aligns more closely with standard loans, facilitates shorter negotiations by eliminating the need for detailed loan agreements, and allows for commercially agreeable terms with private funds through the issuance of notes.