As the Thai stock market faces a downturn, Thai investors have shown increased interest in depositary receipts (DRs), which offer the same tax benefits as Thai stocks while providing access to foreign securities. However, recent speculation in the media has raised concerns among regulators and the market, raising questions about whether DR issuers actually hold the underlying foreign securities purported to be backing the DRs. This has brought the structural integrity of DR programs under scrutiny. Why This Question Matters In global practice, DRs are understood to be backed by the foreign securities they reference, giving investors economic exposure that closely mirrors direct ownership. When the issuer does not hold the underlying securities directly, the risk profile shifts to the strength of its custodial, hedging, and liquidity arrangements. Those arrangements determine whether DR holders receive equivalent economic and voting rights, how corporate actions are transmitted, and whether conversions or redemptions can be completed in full and on time. In Thailand, the standardized DR disclosure templates and the express allowance for global custodians indicate a regulatory focus on transparency and structural safeguards that preserve these outcomes, even if the issuer’s name does not appear on the foreign share register. Thai Rules for DR Offerings Thai DR offerings are governed by specific Securities and Exchange Commission (SEC) notifications and standardized prospectus forms. These instruments establish the disclosure regime for DR structures, risk factors, and the issuer’s arrangements to support the DR program. The framework expressly contemplates the use of a global custodian, indicating that DR issuers are not required to hold the underlying foreign securities directly in their own name if sufficient controls and operational arrangements are in place for the issuer to deliver economic benefits and, where applicable, underlying securities to DR holders when required. More broadly, the relevant SEC

In September 2025, Thailand’s Securities and Exchange Commission (SEC) accused a company listed on the Stock Exchange of Thailand (SET), including its current and former directors, of concealing material information in connection with its filing registration and draft prospectus. This recent enforcement action demonstrates the serious consequences of making false statements or appearing to conceal material information in IPO filings and ongoing disclosures. In addition to being subject to criminal penalties, such actions can impact the eligibility of directors and executives to serve and may cause lasting reputational damage. Key Legal Risks The Securities and Exchange Act B.E. 2535 (1992) (as amended) imposes strict liability for making false statements or concealing material information in IPO registration statements and draft prospectuses. In such cases, investors can claim for damages, and there are also criminal penalties, including imprisonment for up to five years and substantial fines, may apply to the company, its directors, and responsible officers. However, misstatements or omissions in IPO filings do not, by themselves, disqualify directors or executives from holding office, whether arising from an SEC accusation or even a final court judgment. In contrast, for ongoing disclosures after listing, such as financial statements, annual reports, and meeting notices, false or misleading statements or concealment of material information can result in not only criminal liability but also immediate disqualification of directors and executives. If the SEC accuses a listed company or its directors or executives of such misstatements or omissions, those directors or executives are immediately disqualified from their positions, even before a final court judgment. Director and Executive Qualifications Directors and executives must meet the SEC’s specified standards of trustworthiness, as set out in the relevant rules. The SEC clearly defines characteristics that are considered to demonstrate a lack of trustworthiness. For ongoing disclosures, being involved in

Attorneys from Tilleke & Gibbins have updated the latest edition of Doing Business in Thailand, a Q&A-style guide from Thomson Reuters Practical Law that offers an overview of key legal considerations for companies operating in jurisdictions worldwide. The contribution outlines the country’s legal and regulatory framework for foreign investment and business operations and reflects the latest legislative developments. The chapter addresses the following core topics: Legal system: Structure of the courts and the codified nature of Thai law. Foreign investment: Business restrictions under the Foreign Business Act, sector-specific regulations, exchange control rules, and investment incentives. Business vehicles: Overview of partnerships, private and public limited companies, and other legal entities. Employment: Labor protections, employment contracts, foreign worker requirements, and termination procedures. Tax: Corporate and personal income tax, indirect taxes, and tax obligations for residents and non-residents. Intellectual property: Registration and enforcement of patents, trademarks, designs, and copyrights. Data protection: Key provisions of the Personal Data Protection Act and related compliance obligations. Competition law: Regulatory framework under the Trade Competition Act. Anti-bribery and corruption: Relevant legislation and enforcement mechanisms. E-commerce and digital business: Legal regime for online transactions and digital platforms. Marketing and advertising: Consumer protection laws and regulations affecting advertising and marketing practices. Product regulation and liability: Safety standards, liability regimes, and roles of enforcement authorities. Practical Law, a legal reference resource from Thomson Reuters, publishes a range of guides for hundreds of jurisdictions and practice areas. The insurance and reinsurance guide is a valuable resource for legal practitioners, covering numerous jurisdictions worldwide. To view the latest version of the guide, please visit the Practical Law website and enroll in the free Practical Law trial to gain full access.