SEC aid for green issuers joining LGX

The Securities and Exchange Commission (SEC) plans to provide support for Thai green bonds that plan to list on the Luxembourg Green Exchange (LGX) as part of a plan to facilitate long-term sustainable growth in finance.

A green bond is a fundraising instrument for eco-friendly projects or businesses related to environmental, social and governance (ESG) causes.

TMB Bank emerged as Thailand’s first green bond issuer in June 2018, and five more issuers — Kasikornbank, B.Grimm Power, BTS Group Holdings, Energy Absolute and Bank of Ayudhya — have since begun offering green bonds.

The six issuers mobilised a combined 40.2 billion baht, according to SEC data.

SEC secretary-general Ruenvadee Suwanmongkol said the market regulator has studied and negotiated with the LGX, which is a specialised platform dedicated to green social and sustainable bonds.

The LGX is the first exchange in the world to disclose investment for bond and mutual funds from many countries.

The SEC has studied the rules and regulations of bond listing and trading on Luxembourg’s capital market, and conducted regulatory mapping to facilitate companies interested in listing on the LGX.

The study is expected to be completed this year.

Listing Thai corporate green bonds on the LGX will provide benefits for Thai firms, allowing them access to global funding resources and exposing them to foreign investors, potentially revving up investment liquidity in the long run, said Ms Ruenvadee.

The SEC is also considering setting up a bulletin trading platform for Thailand’s sustainable debt instruments in the future.

This trading platform would be similarly structured to the LGX.

The SEC will continue supporting Thai firms issuing green bonds by waiving the issuing fee for one year.

Previously, the fee waiver for green bond issuance was scheduled to end in May this year.