Equity Instruments

Listing of Infrastructure Fund (IFF)

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IFF: Infrastructure Fund 

A mutual fund established to raise funds from general investors including retail and institutional investors, with proceeds going toward infrastructure projects that benefit the public on a large scale and are vital to Thailand's economic growth and development.

A mutual fund established to raise funds from general investors including retail and institutional investors, with proceeds going toward infrastructure projects that benefit the public on a large scale and are vital to Thailand's economic growth and development.

Benefits of IFF 


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A fundraising alternative for public and private sectors

Through IFFs, both public and private sectors can use their revenue-generating infrastructure businesses to raise funds from investors and use the proceeds to develop new large-scale projects, which require substantial investment.

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For government agencies

IFFs can reduce restrictions on government agencies' budget and public debts because the country still needs more necessary infrastructure projects.

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For investors

IFFs increase investment options and opportunities in the country's infrastructure assets while also providing 10 years dividend tax exemption for retail investors.

IFF structure


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Types of investment in Infrastructure Business


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An IFF can choose to invest in the following types of infrastructure business:

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Direct investment through an ownership in the assets: suitable for infrastructure assets with transferable ownership such as assets of private entities

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Investment in revenue sharing agreement or leasehold: suitable for public assets with  non-transferable ownership/ concession

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Investment in companies operating infrastructure business

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An IFF can choose to invest in the following types of infrastructure business:

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Direct investment through an ownership in the assets: suitable for infrastructure assets with transferable ownership such as assets of private entities

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Investment in revenue sharing agreement or leasehold: suitable for public assets with  non-transferable ownership/ concession

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Investment in companies operating infrastructure business

Types of assets in which IFF can invest

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Railway or pipeline transportation

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Airports/ Airfields / Deep seaports

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Roads/expressways/concession ways

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Alternative energy

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A Multi-infrastructure project which includes multiple infrastructure assets

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Waterworks /Electricity generation

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Water management system and irrigation system Waste management system

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Natural disaster prevention system

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Natural disaster prevention, warning, and management system

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Telecommunication, or infrastructure for Information Technology and Communication

General characteristics of IFF 


Type of fundAn IFF is a close-ended fund with non-redeemable units (1). The fund's name must begin with "Infrastructure Fund," followed by words describing the types of infrastructure activities the IFF invests in.
Registered capitalAt least THB 2,000 million 
Unit Types
  • An IFF may issue various types of investment units with different rights or benefits (multi-tranche)
  • All units must have the same par value 
  • Investment units of the same type must carry equal rights and benefits 
Investment in infrastructure assets
  • Brownfield project (2) and/or;
  • Greenfield project (3). The infrastructure assets under this type must be specifically described 
  • Invest  in infrastructure assets ≥ 75% of total asset value / own ≥ 75% of shares in the company who operates infrastructure business
Number of unit holders after IPONot less than 500 
Except in case of funds having policy to invest in in Greenfield Projects more than 30% of the total asset value of such funds, there must be at least 35 high net-worth investors (4)
ListingSET
  • Asset Management Company must list the investment units to be generally offered to investors on SET within 30 days since the fund ‘is registered as a mutual fund
  • If the fund invests in a Greenfield Project and has issued investment units to be wholly offered to high net-worth investors, the asset management company must set out restrictions that such units must not be transferred to non-high net worth investors and listed on SET while the project is still a Greenfield Project. Once the project has matured into a completed project, the asset management company must list such units within 3 years.
Dividend payment ≥ 90% of adjusted net profit 

Remarks
(1) Except in case of buy-back of the units specifically described in the project which the asset management company is able to demonstrate that such buy-back will not impact the fund's viability
(2) A completed project refers to an infrastructure business which has completed the construction and has begun to generate revenue
(3) An incomplete project refers to an infrastructure business which has not yet begun construction, is under construction, or has completed the construction but has not yet begun to generate revenue
(4) A high net-worth investor refers to someone who makes an initial unit purchase of at least THB10 million or whose total unit value, including additionally acquired and existing units, is at least THB10 million. The value of such investment units must be calculated based on the trading value at the time of purchase.

Fundraising channels for infrastructure business


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Remarks
* Fundraising in a form of company including: 
1) Company with general business operation;
2) Company whose main business is to hold shares (Holding company); and
3) Company investing in infrastructure project (Infrastructure company)

Infrastructure Fund vs Infrastructure Trust
 Infrastructure FundInfrastructure Trust
Structure   Mutual FundTrust
InvestmentInfrastructure that benefits the public on a large scale in Thailand Infrastructure that benefits the public on a large scale in Thailand or abroad
Project valuation≥ THB 2,000 million ≥ THB 10,000 million
Tax privileges Tax privileges (up to 10 years dividend tax exemption for individuals)No tax benefits privilege 

Infrastructure Fund
Besides listing on the SET, an infrastructure company may utilize its assets in raising fund in the form of infrastructure fund (Infra Fund). Setting up a mutual fund needs to get permission from the SEC and get the fund units listed on SET. Qualifications of the fund and its units are as follows:

Fund means an infrastructure fund or the Thailand Future Fund as the case may be.

  • Be fully paid
  • Holding bearer’s name
  • No restrictions on transferring the trust units, except for the legal restrictions. Such restrictions must be stated in the project.
  • An infrastructure fund can invest in the infrastructure businesses, which refer to the following businesses as per SEC rule:
    • Rail or pipeline transportation
    • Electricity, waterworks
    • Roads, special path, or commissioned path
    • Airports
    • Deep water port
    • Telecommunication or ICT Infrastructure
    • Alternative energy
    • Water management or irrigation systems
    • Natural disaster protection systems including the warning system and disaster mitigation system
    • Waste management system
    • Multi-infrastructure business comprising of complementary facilities, which are:
      • Connected, or promoting mutual benefits, or beneficial to the community or its neighborhood; and
      • Generating or having income contribution for no less than 80% of the composite revenue
  • Infra fund going to list on SET must have the following qualifications:
    • Approved by SEC
    • Having the SEC-approved fund manager
    • Having retail unit holders for no less than 20% of each listed tranche

Appointing Thailand Securities Depository Co., Ltd. (TSD) or other SET-approved persons to act as securities registrar

  • Fund management firm submits the listing request
  • Requesting listing for all issued fund units
  • Submitting the request, required documents, and application fee to SET

The SET will consider listing request within seven days upon receiving complete and correct documents

Process of Listing Consideration for an Infrastructure Fund

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Related Regulations

  • Notification of Capital Market Supervisory Board TorNor 1/2554: Rules, Conditions and Procedures for Establishment and Management of Infrastructure Funds
  • Notification of Capital Market Supervisory Board TorNor 10/2554 : the registration of mutual fund from asset fund and the process of amendment relating to registration
  • Notification of the Office of the Securities and Exchange Commission Sor Nor. 34/2554 : Details of the Mutual Fund Scheme for an Infrastructure Fund
  • Notification of the Office of the Securities and Exchange Commission Sor Nor. 35/2554 : Prospectus for Infrastructure Fund
  • Notification of the Securities and Exchange Commission KorNor. 1/2554: Rules, Conditions and Procedure for Borrowing Money and Encumbering the Asset of Infrastructure Mutual Fund
  • Notification of Capital Market Supervisory Board Tor Nor. 27/2554 : Commitment between the Unitholders of an Infrastructure Fund and the Management Company
  • Notification of Capital Market Supervisory Board TorNor 8/2559 : criteria, conditions, process of establishment, and management of Thailand Future Fund
  • Notification of Capital Market Supervisory Board SorNor 15/2559 : detail of Thailand Future Fund
  • Notification of Capital Market Supervisory Board TorNor 9/2559 : obligations between holders of Thailand Future Fund investment units and the fund of management
  • Notification of Capital Market Supervisory Board TorNor 45/2561 : the offering of Thailand Future Fund

Forms

  • Listing Application Infrastructure Fund Listing on the Stock Exchange of Thailand (IFF)