Does SEC Aiming to Ban Thais from Trading NVDR?

*This article has been updated after “Kaohoon” had contacted an official from Thai SEC


The Securities and Exchange Commission (SEC) is planning to bar Thai investors from  trading non-voting depository receipts (NVDRs) as it can be used as a loophole for a fraud, according to the report by Bangkok Post on Friday, citing an interview with SEC secretary-general Pornanong Budsaratragoon herself.


The Thai english-language newspaper published the article online, saying that regulators are aiming to close an avenue for fraud in the capital market following the More Return Public Company Limited (SET: MORE) case that saw the damage in this swindle of over 7,000 million baht.

A non-voting depository receipts known as NVDRs is a trading instrument to stimulate trading activities in the Thai stock market, especially for foreign investors that saw foreign ownership restrictions regulated under Thai law.

NVDRs are an alternative option for the investment of foreign investors. By investing in NVDRs, investors receive the same financial benefits (i.e., dividends, right issues or warrants), as those who invest directly in a company’s ordinary shares. The only difference between investing in NVDR and company shares is that NVDRs do not have voting rights of the company. Both Thai and foreign investors can invest in NVDRs.


The online outlet noted that the Boards of Thai SEC have endorsed the ban, and the announcement is expected to come later.

However, people close to regulators said that there could have been a miscommunication regarding the banning measure as SEC would need a public hearing before pushing this restriction into laws.


*According to an official at SEC, Ms. Pornanong stated that the regulators were raising an idea on the banning, but the measure needs public hearing before making it into law.