The SEC’s Reform of Rules on Material Transactions (MTs) and Related Party Transactions (RPTs): Key Implications for Boards, Shareholders, and Listed Companies
Transition to new regulatory framework
The Securities and Exchange Commission (“SEC”) has issued (i) Notification of the Capital Market Supervisory Board No. TorJor. 45/2568 re: Rules on Material Transactions and (ii) Notification of the Capital Market Supervisory Board No. TorJor. 46/2568 re: Rules on Related Party Transactions, which repeal the existing notifications on MT and RPT rules, with effect from 1 July 2026.
In parallel, the Stock Exchange of Thailand (“SET”) has indicated that it intends to repeal SET regulations on MTs and RPTs to avoid regulatory overlap. Therefore, going forward, MTs and RPTs of listed companies will be governed primarily by these new SEC notifications.
In more detail
Key changes include:
Changes to both MTs and RPTs
• Veto rights of shareholders. Where the audit committee or the independent financial advisor (IFA) is of the opinion that a transaction should not be approved, the transaction may be vetoed if shareholders holding, in the aggregate, at least 10% of the voting rights of the shareholders attending the meeting and entitled to vote, vote against the transaction.
• Ongoing reporting duties. Following shareholders’ approval, listed companies must provide six-monthly progress updates and promptly disclose any material changes to, or cancellation of, the transaction. Such progress updates must also be disclosed in the company’s annual report (Form 56-1 One Report).
• Net Asset criterion. In calculating the transaction size, “Net Asset” criterion applies instead of the “Net Tangible Asset” (NTA) criterion. As a result, intangible assets and non-controlling interests are no longer required to be deducted from the company’s total assets when determining the transaction value.
MT Regime
• Actions required by transaction size.
Transaction size Actions required General MTs A company with negative net assets or operating losses1
Board of directors’
approvalDisclosure through SET portal Shareholders’ approval IFA’s opinion X < 25% X < 10% - - - - 25% ≤ x ≤ 50% 10% ≤ x ≤ 25% ✔ ✔ ✔ - X ≥ 50% X ≥ 25% ✔ ✔ ✔ ✔ • Combined transaction value. Transactions that are related to or form part of the same project and that occur within the 12-month period prior to the date of entering into the transaction must be combined for the purpose of calculating the transaction size, except for transactions already approved by shareholders.
• Exemptions from MT requirements. The SEC clarifies that certain transactions are exempted from MT requirements, such as intra-group MTs between a listed company and its subsidiary or among its subsidiaries, as well as transactions undertaken for liquidation management purposes.
• More flexibility for listed companies. Where disclosure or prior shareholders’ approval may materially prejudice the company’s interests (e.g., in bidding or tender processes), a listed company may seek shareholders’ approval in principle in accordance with SEC-prescribed procedures without disclosing detailed information.
RPT Regime
• Actions required by transaction size. For an RPT not conducted on an arm's-length basis:
Transaction size Actions required General RPTs. Financial assistance to
(i) an individual;
(ii) an entity in which the listed company or its subsidiaries hold shares in a lower proportion than other related parties; or
(iii) an entity in which the listed company or its subsidiaries do not hold any share.Board of directors’ approval Disclosure through
SET portalShareholders’ approval IFA’s opinion THB 1 million < x < TH 20 million
or
0.03% of Net Asset < x < 3% of Net Asset
(whichever is higher)x < THB 100 million
or
x < 3 % of Net Asset
(whichever is lower)✔ ✔ - - x ≥ THB 20 million
or
x ≥ 3 % of Net Asset
(whichever is higher)x ≥ THB 100 million
or
x ≥ 3 % of Net Asset
(whichever is lower)✔ ✔ ✔ ✔ • Combined transaction value. Transactions with the following counterparties occurring within the past six months (excluding those already approved by shareholders) must be combined for the purpose of calculating transaction size: (i) the same counterparty; (ii) major shareholders, controlling persons, related persons, or close relatives of (i); (iii) related persons or close relatives of persons under (ii); and (iv) juristic persons in which any person under (i) - (iii) is a major shareholder or controlling person.
• Reduced SEC discretion. The SEC’s discretion to grant (i) exemptions from RPT requirements where the company can demonstrate the fairness of RPTs and the absence of benefit transfer, and (ii) waivers of the requirement to obtain an IFA opinion, has been removed.
Transitional provisions
Any MT and RPT transactions approved by the board of directors for submission to the shareholders’ meeting prior to 1 July 2026 will continue to be governed by the former MT and RPT notification requirements.
Outlook and conclusions
Other changes, for example, adjustments to the transaction value calculation methods, refinements of definitions, reinforcements of the substance-over-form principle, and clearer exemptions from regulatory requirements, have also been introduced by the SEC as part of its efforts to eliminate inconsistencies across regulations, improve predictability and transparency, while further enhancing investor protection. Going forward, the SEC will continue to play a proactive role in implementing preventive measures and strengthening market supervision. Following this regulatory shift from the previous MT and RPT rules, the SEC will further issue guidelines to facilitate compliance by listed companies and relevant stakeholders. As a practical matter, boards and management should review internal approval matrices, disclosure workflows, and transaction-structuring practices to ensure alignment with the new framework ahead of the 1 July 2026 effective date.
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1If the transaction may adversely affect the company’s financial position or operating results.
