ThaiBMA aims to strengthen protection for retail investors by introducing stricter bond covenants to prevent misuse of proceeds, including limits on dividend payments, share buybacks and additional borrowing that could weaken an issuer's repayment capacity, says Ms Ariya.
The Thai Bond Market Association (ThaiBMA) is working with the Securities and Exchange Commission (SEC) to amend the Securities and Exchange Act and bankruptcy law, closing legal loopholes that have allowed some bond issuers to avoid repayments through rehabilitation proceedings.The move follows a series of high-profile defaults that have damaged confidence in Thailand's debt market, said ThaiBMA president Ariya Tiranaprakit.
The proposed reforms will be submitted to the SEC-led Bond Task Force, a multi-agency committee established to strengthen the bond market, with detailed measures expected to be announced soon, she noted.
According to Ms Ariya, ThaiBMA wants to strengthen protections for retail investors by introducing stricter bond covenants to prevent misuse of proceeds, including limits on dividend payments, share buybacks and additional borrowing that could weaken an issuer's repayment capacity.
Companies would need board and shareholder approval before changing the stated use of bond proceeds, reducing the risk of funds being diverted.
