The Securities and Exchange Commission (SEC) of Thailand is preparing to ban Thai investors from trading non-voting depository receipts (NVDRs), aiming to prevent fraud in the capital market.
According to SEC secretary-general Pornanong Budsaratragoon, the ban was endorsed by the SEC’s Capital Market Supervisory Board and will be announced later.
NVDR, a trading instrument initiated by the Stock Exchange of Thailand (SET), allows foreign investors to invest beyond the foreign ownership limit.
Foreign investors holding NVDRs are eligible to receive benefits, such as dividends, rights issues, and warrants, in the same manner as if they invested in an ordinary share. However, they have no right to vote at company shareholders’ meetings.
Although NVDRs have the objective of facilitating foreign investment, they previously did not prohibit Thai investors from using this channel. Very few Thais traded NVDRs because they can fully trade via the SET main board with no limits on shares./.
Source: Vietnam News
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