The Thai Securities and Exchange Commission (“SEC”) has finalized a comprehensive overhaul of the regulatory framework governing the regulation of Material Transactions (“MT”) and Related Party Transactions (“RPT”) undertaken by companies listed on the Stock Exchange of Thailand (“SET”) and the Market for Alternative Investment (“mai”), including their subsidiaries. The revised rules will take effect on 1 July 2026.
The new framework responds to increasingly complex transaction structures, business diversification, and the continued development of Thailand’s capital markets. It reflects the SEC’s policy shift toward enhanced investor protection, stronger board accountability, and greater shareholder oversight, while aligning Thai capital market regulation more closely with international corporate governance standards.
General Principles
While the fundamental structure of the MT and RPT regimes remains largely intact, the SEC has codified existing practices and exemptions to reduce interpretive ambiguity and simplified the methodology for calculating transaction size.
- Similar to the current regimes, certain MT and RPT entered into by a listed company or its subsidiaries may trigger one or more regulatory requirements, depending on the size and material impact of the transaction. These requirements may include: (i) immediate disclosure of the relevant board resolution through the Exchange’s electronic system; (ii) prior approval by shareholders representing not less than three-fourths (¾) of the votes cast by shareholders present and entitled to vote, excluding interested shareholders; and/or (iii) the inclusion of an opinion from an independent financial advisor (“IFA”) in the notice convening the shareholders’ meeting.
- However, under the amended rules, the SEC has amended how to determine the MT size, which will be based on the highest percentage derived from:
- (Net Asset Value1/ of the target x % shares acquired/disposed) x 100
Net Asset Value of the listed company - (Net Profit2/ of the target x % shares acquired/disposed) x 100
Net Profit of the listed company - Total consideration paid or given x 100
Total assets of the listed company. - New Shares2/ issued by the listed company as consideration x 100
Total paid-up shares of the listed company
- (Net Asset Value1/ of the target x % shares acquired/disposed) x 100
- RPT size is determined by reference to the value of transaction entered into with the related party, as compared against the applicable regulatory trigger threshold and the Net Asset Value1/ of the listed company.
1/ The term “Net Asset Value” replaces “Net Tangible Asset” in both the MT and RPT regulations. This revision addresses ambiguities arising from the exclusion of intangible assets under the original “Net Tangible Asset” terminology.
2/ The term “Net Profit” and “New Shares” replace “Net Profit from Normal Operations” and “New Securities,” respectively, in the MT regulations. These revisions have been made to align with prevailing market practices.
Key Amendments and Regulatory Rationale
The key amendments are intended to reinforce minority shareholder protection, promote greater transparency in significant corporate transactions, and subject listed companies with heightened financial risk profiles to increased oversight.
1. Enhanced Shareholder Safeguards
- Reduced Shareholders’ Approval Requirement Thresholds for MT:
- The shareholders’ approval requirement threshold for general MT has been reduced from 50% to 25%.
- For high-impact listed companies—namely, those with negative net assets for the latest quarter or total net loss over the last 12 quarters, where a transaction may materially and adversely affect the listed company’s financial position or operating results (subject to further SEC guidance)—the approval requirement threshold has been further reduced to 10%.
- The IFA opinion requirements have been recalibrated:
- An IFA opinion is required for general MT with a transaction size of 50% or more, and for high-impact MT with a transaction size of 25% or more.
MT | RPT | Required Procedures | ||
High Impact MT | General MT | Financial assistance where a listed company group holds a lower stake than related parties | General RPT | |
- | - | < 100 THB million or < 3% of NAV whichever is lower | > 1 THB million or > 0.03% of NAV whichever is higher | Board approval, Disclosure |
≥ 10% | ≥ 25% | - | - | Board approval, Disclosure, Shareholders’ approval, Progress Report |
≥ 25% | ≥ 50% | ≥ 100 THB million or ≥ 3% of NAV whichever is lower | ≥ 20 THB million or ≥ 3% of NAV whichever is higher | Board approval, Disclosure, IFA opinion, Shareholders’ approval, Progress Report |
- Enhanced Minority Veto Rights
- If the Audit Committee or the IFA advises that the Company or its subsidiary should not enter into an MT or RPT, the transaction must not proceed if the shareholder(s) holding 10% or more of the total voting rights of the shareholders attending the meeting and entitled to vote cast their votes against the proposed transaction.
- Expanded Scope of Shareholder Oversight under MT Rules
- Leases or hire-purchases of assets or businesses, and the provision of financial assistance —previously subject only to RPT rules where related parties were involved—are now also within the scope of the MT regime.
- Exemptions under the MT and RPT Rules
- Exemptions under the MT rules apply to: (i) leases, hire-purchases, and financial assistance undertaken in the ordinary course of business; (ii) transactions between a listed company and its subsidiaries, or among subsidiaries; (iii) liquidity management (limited to low-risk instruments) for non-financial institution[1] (iv) financial asset investment by financial institutions (vi) shares buyback; (iv) current asset management in the ordinary course of business; and (vii) the incorporation of new subsidiaries.
- Exemptions under the RPT rules remain unchanged. These include board-approved transactions on normal commercial terms, intra-group transactions where related parties hold not more than 10% of a subsidiary’s paid-up share capital, firm underwriting arrangements, rights and preferential offerings, employee share option plans (ESOPs), and employee welfare loans.
2. Transaction Aggregation and “Substance-Over-Form”
The SEC has strengthened anti-avoidance measures to prevent the circumvention of disclosure and shareholders’ approval requirements through transaction splitting:
- MT aggregation: Related transactions, or transactions forming part of the same project, must be aggregated if undertaken within a 12-month period (extended from 6-months), excluding transactions already approved by the shareholders’ meeting.
- RPT aggregation: Transactions entered with the “same group” of related parties must be aggregated over a 6-month period, excluding transactions that have already received shareholders’ approval. The scope of the “same group” has been broadened from related persons and close relative to also include: (i) a major shareholder and controlling person (where the related party is a juristic person); (ii) related persons and close relative of the person in (i); and (iii) juristic persons whose major shareholder or controlling person is any person within the same group described above.
- Substance-over-form discretion: The SEC retains broad discretion to require aggregation of transactions that are connected in substance. Based on prior enforcement precedents, relevant considerations may include whether transactions: (i) are conducted with the same or connected counterparties; (ii) are entered into under a master agreement or pertain to the same project; (iii) involve parts of the same asset or securities or interests in the same company or group; or (iv) collectively result in substantial involvement in a business outside the company’s existing principal business.
3. Enhanced Board Accountability and Disclosure Requirements
The revised regulations have heightened governance and disclosure obligations, which will directly impact listed companies and the accountability of the Boards.
- Board Accountability: Shareholder notices must include a Board certification confirming that the directors have exercised due care and diligence in reviewing all relevant information and have determined that the transaction is reasonable and in the best interests of the Company and its shareholders.
Particularly for MT, if the Board, acting in accordance with its fiduciary duties, determines that compliance with the disclosure and IFA requirements under the MT Rules may materially prejudice the listed company’s interests (e.g., in competitive bids or auction processes):- Disclosure may be made at the Board’s discretion,
- The company may seek shareholders’ approval for the transaction framework and delegate authority to the Board to execute the transaction within the approved framework.
- Disclosure through the Exchange’s electronic system must be made upon the confirmation of the transaction.
- Enhanced Transaction Transparency: Listed companies are required to disclose comprehensive transaction details, including the relevant business plan, through the Exchange’s electronic system and in the notice convening the shareholders’ meeting. Following shareholders’ approval, semi-annual progress updates must be disclosed via the Exchange’s electronic system, and an annual progress update must be included in Form 56-1 One Report.
- Cancellations and Material Changes: Where a transaction is cancelled or materially deviates from the terms approved by shareholders, the company must promptly disclose, through the Exchange’s electronic system, the relevant circumstances, the Board’s rationale and necessity for such action, and the potential impact.
These new requirements significantly elevate the Board’s responsibility in overseeing MT and RPT and enhance disclosure obligations. Directors should ensure that governance processes, documentation standards, and deliberative records are sufficiently robust to support formal Board certification (as mentioned above) — particularly in relation to high-risk, strategic, or complex transactions.
4. Streamline Process for Listed Companies
The amendments introduce certain procedural efficiencies:
- A parent listed company is exempt from shareholders’ approval requirements where its Thai-listed subsidiary has already obtained the requisite approval in compliance with the MT or RPT regulations.
- The requirement to circulate shareholder notices for MTs sized between 15% and 50% has been removed. The requirement for prior SEC approval of draft shareholder notices and IFA opinions has also been repealed.
A Note on Conflicted Shareholders
It is worth noting that, despite the comprehensive overhaul, the revised rules do not address the longstanding inconsistency of the terms regarding the “shareholders’ conflict of interest” between the MT and RPT regulations and the Public Limited Companies Act B.E. 2535 (1992) (as amended) (“PLCA”). The revised regulations still refer to “shareholders having a direct or indirect conflict of interest”, while the PLCA refers to “shareholders having a special conflict of interest”. This leaves uncertainty about the scope of conflicts, including whether interests are limited to material ones, how indirect interests are assessed, and whether listed companies or the SEC should make the call on what constitutes a conflict. The SEC guidance on this issue would help ensure consistent compliance by listed companies.
Practical Implications for Listed Companies
The revised framework substantially expands shareholder involvement, particularly in high-impact or distressed scenarios. Listed companies should prepare for intensified scrutiny regarding transaction structure and rationale, valuation fairness, and governance processes.
Boards and executives should review internal approval thresholds and governance structures—specifically delegations of authority, compliance policies and manual, due diligence protocols, and transaction monitoring frameworks —to ensure operational readiness before 1 July 2026.
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[1] Financial institutions include commercial banks, finance companies, credit foncier companies, insurance companies, and securities companies.