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FAQs
     
  1.

Will Thai NVDR Company Limited cancel trading NVDRs?

  ANS:

No. NVDRs will be traded as normal. The investors can order the participants to trade NVDRs on the stock market as usual as they do with other securities and they will generally obtain NVDRs as ordered. However, the participants will have a little change on their trading procedure and coordinate with Thailand Securities Depository Company Limited to assure that the investors will obtain NVDRs.

   
  2. What is the benefit for changing of NVDRs trading procedure?
  ANS: investors will easily change NVDRs to underlying with cheaper cost.
   
  3. Can you clarify the procedure for converting foreign shares to NVDRs?
  ANS:

According to NVDR prospectus, it specifies that converting NVDRs must be conducted through trading system of the Stock Exchange of Thailand. If the investor holds foreign shares, the investor must convert foreign shares to local shares primarily. Then, the investor can convert to NVDRs by submitting Put-Through order on the trading system. Please note that the investor will obtain more beneficial rights by holding foreign shares, including voting right.† †

   
  4.

Can you clarify the procedure for converting NVDRs to foreign shares?

  ANS:

NVDR holder who would like to convert NVDRs to foreign shares can request his participants to conduct via Post-Trade system. If the foreign limit of that particular security is available, that participant can convert to foreign shares immediately. However, if the foreign limit is full, the investor can request his participants to queue up NVDRs to foreign shares in Post-Trade system.

   
  5.

Which name would appear on the Shares register book, is it Thai NVDR Company Limited or the holders of NVDR?

  ANS: On the book closing date, Thai NVDR name will appear on the registered book of listed companies and retain legal ownership. Thus Thai NVDR will receive benefits from listed companies and then allocates them to NVDR holders whose names appear in the NVDR register book on the bookís closing date.
   
 

6.

Do investors need to make an agreement with Thai NVDR Co., Ltd. (Thai NVDR) before purchasing or selling NVDRs?

 

ANS:    

ŔťNo, they can purchase or sell NVDRs via brokers at any time by specifying in the order form that they are purchasing or selling NVDRs.

 

 


 

7.

On which trading boards can investors purchase or sell NVDRs?

 

ANS:  

They can purchase or sell NVDRs on the main board. The price of NVDRs is equal to the price of the underlying securities.

 

 


 

8.

Can the investors request their brokers to convert local shares on the main board to NVDRs? How much is the commission?

 

ANS:  

Yes. Investors who wish to convert local shares to NVDRs must request their brokers or custodians to do this by executing put-through trading (sell local shares and buy NVDRs at the same time). Investors must pay an NVDR commission equal to that of the underlying securities.

 

 


 

9.

When do investors receive NVDRs from purchasing or selling them on the main board or via The Stock Exchange of Thailand (SET)ís put- through system?

 

ANS:  

They will receive NVDRs on the third consecutive business day following the trading day (T+3) as per the clearing and settlement regulations governing the underlying securities.

 

 


 

10.

How long does it take to convert NVDRs to foreign securities?

 

ANS:  

NVDR holders can request their brokers or custodians to put their NVDRs into TSDís system. If the foreign investment limit for the firm whose securities have been purchased has not been reached, the NVDRs will be converted to foreign securities immediately. However, when the foreign investment limit for that particular listed company has been reached, NVDRs will be queued for conversion to foreign securities, so that investors can receive the same financial benefits during the queuing.

 

 


 

11.

Will NVDR holders who are queuing to convert NVDRs to foreign securities receive all the financial benefits while the NVDR register book is closed, including the right to receive dividends (XD : Exclude Dividend) and to subscribe for additional NVDRs (XR : Exclude Right) ?

 

ANS:  

NVDR holders who are queuing to convert NVDRs to foreign securities will receive the full financial benefits attached to the security of the relevant firm.

 

 


 

12.

For how long after an NVDR transaction can a broker use the clearing house systemís NVDR adjustment function to correct a trading error?

 

ANS:  

The broker can adjust the transaction covering the NVDRís purchase or sale by using the NVDR adjustment function up until no later than 10:30 hours on the third business day (T+3) after the trading error occurred. .

 

 


 

13.

Are there any limitations on the amount and price of securities in changing a trading transaction using SETís put -through system or converting the securities on hand to NVDRs?

 

ANS:  

The procedures under the regulations covering the put - through system are detailed at www.set.or.th under Supervision & Regulations : Notifications & Regulations Ė Trading of Securities.

 

 


 

14.

How does the system operate if investors have orders to sell NVDRs but cannot deliver them by the settlement date?

 

ANS:  

If an investor does not deliver the NVDRs by the settlement date (T+3), the system will debit the same amount of the underlying securities as the NVDRs due from the portfolio clearing account of the investorís broker.

 

 


 

15.

Who can attend and vote in shareholders' meetings on behalf of NVDR holders?

 

ANS:  

Thai NVDR reserves the right to attend shareholdersí meetings but will not vote unless the
meeting has been called specifically to consider delisting.

 

 


 

16.

Do NVDR holders receive the right to subscribe for additional NVDRs if a listed firm grants Thai NVDR the right to subscribe for new shares (XR : Exclude Right) ?

 

ANS:  

Yes. NVDR holders will receive the right to subscribe for additional NVDRs. The allotment and price depends on those of the underlying security.

 

 


 

17.

Where a listed company grants the right to subscribe for new shares (XR : Exclude Right) to their primary shareholders, can the investors indicate their intention to subscribe for additional NVDRs ?

 

ANS:  

No, they cannot. To subscribe for new shares is a right derived from holding primary shares. If investors hold shares, they have the right to subscribe for new shares. However, if investors hold NVDRs, they have the right to subscribe for additional NVDRs.

 

 


 

18.

What capital gains tax are non-resident companies and registered partnerships liable for in Thailand?

 

ANS:  

Non-resident firms and registered partnerships, established pursuant to a foreign law and not doing or deemed to be doing business in Thailand, must pay 15% withholding tax. Furthermore, investors must inform their brokers of costs. However, a non-resident firm and registered partnership, established pursuant to a foreign law and not doing or deemed to be doing business in Thailand and having a reciprocal tax treaty with Thailand, is exempt from having to pay withholding tax.

 

 


 

19.

If investors buy/sell NVDRs and/or underlying shares, thereby increasing/decreasing the number of NVDRs/underlying shares by any multiple of five percent of the total number of voting rights of securities, must they notify Thai NVDR of three (3) business days following such an event, using the form Thai NVDR stiplulates? What happens if NVDR holders donít follow this procedure?

 

ANS:  

Yes, NVDR holders must report acquisition or disposal of NVDRs representing shares, either separately or in combination with the shares (if any) using Form 246-2-NVDR, to Thai NVDR. In addition, NVDR holders are, with respect to the underlying shares, still required to comply with the reporting requirements of Section 246 (Form 246-2). Thus, if they donít report their acquisition, disposal or holding as mentioned in conditions 3.2.1 and 3.2.2, they are subject to a penalty as specified in sections 298 and 275, respectively, of the SEC Act.

 

 


 

20.

Who does the actual reporting of acquisition/disposal of NVDR and underlying shares (if any) (on Form 246-2-NVDR) to Thai NVDR: the brokers or NVDR holders? How is this information publicly disseminated?

 

ANS:  

NVDR holders themselves must report the acquisition/disposal within three (3) business days following the date of such event in the form stipulated by Thai NVDR if, as a result of their holding, they would increase or decrease the number of NVDRs and underlying shares by any multiple of five percent of the total number of voting rights of securities. Thai NVDR will disseminate the information on www.set.or.th/nvdr.

 

 


 

21.

Should investors report acquisition or disposal of NVDRs and underlying shares to SET or SEC if their holdings have reached any multiple of five percent, even though they have previously reported acquisition or disposal (using Form 246-2-NVDR) to Thai NVDR?

 

ANS:  

In this case, investors need only report acquisition or disposal of NVDRs and underlying shares to Thai NVDR. However, if investors hold underlying shares, excluding NVDRs, which total any multiple of five percent of the total number of voting rights of securities, the investor must report to SEC under Section 246 (on Form 246-2).

 

 


 

22.

Are there any investment limitations on NVDRs held by each investor ?

 

ANS:  

Each investor is allowed to hold any combination of NVDRs and shares totaling less than 25 percent of the total number of voting rights of securities of the target company. Investors must includeNVDRs and underlying shares of related persons under section 258 of the SEC Act. Moreover, every NVDR holder must report the acquisition or disposal of NVDRs and/or underlying shares, on a combined basis, whenever the combined holding (treating one NVDR as equivalent to one underlying share) reaches any multiple of five percent of the total number of voting rights of securities, within three (3) business days of such acquisition or disposal of NVDRs and/or underlying shares. If investors hold NVDRs and/or underlying shares totaling of 25 percent or more of the total number of voting rights of securities of the target company, Thai NVDR will compel the redemption of the excess NVDRs from NVDR holders immediately.

 

 


 

23.

Are there any limitations on underlying shares when selling NVDRs?

 

ANS:  

No, there are not.

 

 


 

24.

Can the investors convert Thai Trust Fund (TTF) investment units into NVDRs via SETís put-through system?

 

ANS:  

No. Investors cannot convert these units into NVDR via SETís put-through system. However, NVDR holders can exchange TTF investment units for NVDRs by processing the transaction (selling the investment units and buying the NVDRs) via SETís Automatic Order Matching System (AOM) .

 

 


 

25.

Which underlying securities can NVDR holders invest in?

 

ANS:  

NVDR holders may invest in four types of underlying securities as follows:
1. Ordinary shares
2. Preferred shares
3. Warrants
4. Transferable Subscription Rights (TSRs)

 

 


 

26.

Will NVDR holders who exercise NVDRs representing warrants receive NVDRs or the underlying securities?

 

ANS:  

NVDR holders who exercise NVDRs representing warrants will receive NVDRs based on the type of the underlying securities.

 

 


 

27.

Are NVDR holders allowed to invest in property funds?

 

ANS:  

No, because SEC does not allow Thai NVDR to invest in property funds which it regards as unit trusts.

 

 


 

28.

Is the ISIN (International Securities Identification Number) code of NVDRs the same as that of the underlying securities?

 

ANS:  

No, the ISIN code of NVDRs is different from that of the underlying securities because of the variety of securities. You can obtain more detail on ISIN codes at www.set.or.th/nvdr.

 

 


 

29.

What is the calculation method for the right to subscribe for additional NVDRs (XR : Exclude Right) ?

 

ANS:  

The method of calculation for the right to subscribe for additional NVDRs (XR : Exclude Right) is separate to that of the underlying securities because they are considered as different types of securities.

 

 


 

30.

How will the members of Thailand Securities Depository Co., Ltd. (TSD) register NVDR holders and shareholdersí names by the book closing date for transmission to TSD?

 

ANS:  

TSD members must separate the lists of NVDR holders and shareholders by the book closing date because they are considered as holding different types of securities.

 

 


 

31.

Do NVDR holders receive the right to receive dividends (XD : Exclude Dividend) or the right to subscribe for additional NVDRs (XR : Exclude Right) directly from Thai NVDR?

 

ANS:  

Yes, they do. Thai NVDR receives financial benefits from listed firms and then allocates them to NVDR holders whose names appear in the NVDR register book on the bookís closing date.

 

 


 

32.

What kind of payment are the payment instead of dividends ?

 

ANS:  

The payment instead of dividends are considered as income under Section 40(4)(g) so NVDR holders will be unable to claim any refund or credit of the payment instead of dividends.

 

 


 

33.

Will Thai NVDR issue tax deduction certificates for payment instead of dividends to NVDR holders?

 

ANS:  

Thai NVDR will issue tax deduction certificates for payment instead of dividends to NVDR holders like dividend payments from listed companies.

 

 


 

34.

Will NVDR holders receive the tax benefits promoted by the Board of Investment (BOI) from underlying securities that are invested in by Thai NVDR?

 

ANS:  

Dividends paid to those who invest in companies promoted by BOI are exempt from income tax on those
dividends. However, Section 34 of the Investment Promotion Act (B.E. 2520), which grants these exemptions, applies only to those who directly invest in the promoted firm. Since
individuals or juristic persons who have bought NVDRs are not direct investors, they are not entitled to the exemptions.

 

 


 

35.

Can NVDRs be pledged as collateral like underlying securities?

 

ANS:  

Yes. they can.

 

 


 

36.

Does the credit balance system assign an initial margin for trading or collateral of NVDRs as with underlying securities?

 

ANS:  

Yes.

 

 


 

37.

Must NVDR holders apply to use the e-Dividend service if they have previously applied to use the service for transferring underlying securitiesí dividend payments into their bank accounts?

 

ANS:  

No; their previous application to use the service will also apply to their NVDRs.

 

 


 

38.

How does the announcement of The Bank of Thailand (BOT) about changes in fees for transferring dividend payments directly into a bank account or by e-Dividend since April 3, 2006 affect to receive payment instead of dividends of NVDR holders ?

 

ANS:  

The Bank of Thailand (BOT) has announced changes in fees for transferring dividend payments directly into a bank account or by e-Dividend. If the dividend payment exceeds THB 40,000,000 (two million baht only) after withholding tax, the company will pay by check.
- If dividends from underlying securities are received by Thai NVDR by e-Dividend and do not exceed THB 40,000,000 (forty million baht only), Thai NVDR will pay dividends to NVDR holders on the next business day following the underlying securityís dividend payment date.
- If dividends from underlying securities are received by Thai NVDR by e-Dividend and exceed THB 40,000,000 (forty million baht only), Thai NVDR will pay out dividends to NVDR holders on the second business day following the underlying securityís dividend payment date. This one-day delay is to allow for check clearance.
- If the payment instead of dividends to any given Thai NVDR holder exceeds THB 40,000,000 (forty million baht only), Thai NVDR will request its registrar, TSD, to pay by cheque. (e-Dividend)

 

 


 

39.

Can NVDR holders receive payment instead of dividends in a foreign currency?

 

ANS:  

Yes, NVDR holders resident outside Thailand can receive payment instead of dividends in a foreign currency by requesting their broker or custodian bank to apply to Thai NVDR via the program on the depository system (PTI) before the NVDRís book-closing date. Payment in the designated currency will cover every security or NVDR held by the given investor until the broker or custodian bank is requested to change the currency.

 

 


 

40.

Can investors order the purchase or sale of NVDRs if the underlying securities are being delisted from the Exchange and Thai NVDR has not invested in those securities?

 

ANS:  

Investors can regularly order the sale of NVDRs but can not order purchases. If, in this case, investors order a purchase of NVDRs, they will receive the underlying securities instead.

   
   
   
 

 


For more information, please contact SET Contact Center Tel. +662 009 9999 Fax. +662 009 9991
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