Proposed Amendment to the Share Buyback Regulation: To Boost Capital Market Competitiveness with More Flexibility (Thailand)

Current regulations

The current law and regulations governing share buybacks are (i) the Public Company Limited Act of 1992, as amended (the “PCL Act”), and (ii) the Ministerial Regulation Prescribing Rules and Procedures for Repurchase of Shares, Disposal of Repurchased Shares, and Deduction of Repurchased Shares of Companies of 2001, dated 23 November 2001, as amended (the “Ministerial Regulation”). Under the PCL Act, share buyback is only permitted for public companies in two scenarios※1:

1. Dissenting Shareholders: The Company can buy back shares from shareholders who dissent following an amendment to the Company’s articles of association that has an impact on their voting or dividend rights.
2. Financial Management: Share buyback programs are allowed for financial management purposes when the Company has retained earnings and excess liquidity, with a condition that the buyback must not lead the Company into financial distress. This type of buyback is more common in the market than scenario 1.

Upon completion of a share buyback, the Company is obligated to notify the registrar of the repurchased shares and publicly disclose the information. The shares repurchased are not counted as a quorum for the shareholders’ meeting, do not have any voting rights attached to them, and are not entitled to dividend payment.

Repurchased shares can be disposed of by the Company after a minimum of three (3) months from the end of each repurchase round and must be disposed of within three (3) years. The disposal of shares can be done either through: (i) rights offering to the Company’s existing shareholders; (ii) offering to the Company’s directors or employees; (iii) public offering; or (iv) specifically for listed companies, the Automatic Order Matching system (AOM) of SET. If the shares are not disposed of within this three-year period, the Company must cancel them through a capital reduction.

The Company can initiate a new share buyback program after a six-month waiting period from the conclusion or cancellation of the previous program.

Proposed amendments

On 17 June 2025, the Cabinet granted in-principle approval to proposed amendments concerning share buyback regulations, i.e., the draft Ministerial Regulation Prescribing Rules and Procedures for Repurchase of Shares, Disposal of Repurchased Shares, and Deduction of Repurchased Shares of Companies (No. …) of (the “Amendment”). The Amendment, put forth by the Ministry of Commerce (the “MOC”) in collaboration with the Thai Securities and Exchange Commission and the Stock Exchange of Thailand (the “SET”), is designed to enhance the competitiveness of Thailand’s capital markets by providing listed companies with greater flexibility in liquidity management.

The Amendment includes:

1. Eliminating the six-month waiting period whereby public companies will be able to launch a new share buyback program immediately after the conclusion or cancellation of the previous program.
2. Extending the disposal period for public companies listed on the SET in the case where the Company’s share price during the buyback period is lower than or equal to the average repurchase price whereby the disposal period can be extended by an additional two (2) years. If the Company still cannot dispose of all repurchased shares within this extended period, it can further extend the disposal period by up to one (1) more year. This means the total disposal period could be up to six (6) years, an increase from the current maximum of three (3) years. However, any such extension will require prior approval from a shareholders’ meeting.

Next steps

In its approval, the Cabinet also directed the MOC to consider the views of the Office of the National Economic and Social Development Council (the “NESDC”). The NESDC has expressed concerns that these amendments could potentially create loopholes for listed companies to engage in speculative activities, leading to distorted security prices and increased risks for investors. This, in turn, could negatively impact overall capital market confidence in the long term.

In response to the Cabinet’s directive, the MOC held a second public hearing on the proposed amendments to gather additional feedback from the general public. This second public hearing period was open from 1 to 15 July 2025.

The MOC will submit the feedback gathered during this period to the Office of the Council of State, which will then review the draft amendments. It is recommended that companies should closely watch for the promulgation of the revised regulation, as it is expected to reshape how businesses approach share buybacks.

We will keep you posted on any significant developments to the Amendment.