This report assesses Thailand’s capital markets and provides policy recommendations in six areas to strengthen their role in supporting growth, job creation and national strategic goals.
Improving the capital market institutional landscape and corporate governance. Thailand’s capital market has a distinct division of responsibilities between the Securities and Exchange Commission of Thailand (SEC), listed company boards, investors and other market participants. While the SEC plays a central role, excessive reliance on its oversight weakens market discipline and shifts accountability from market participants to the regulator. In addition, slow enforcement negatively affects investor confidence. Although Thailand’s corporate governance framework is solid, further progress is needed. Since the last revision of the Corporate Governance Code in 2017, international standards have evolved significantly. Related party transaction rules, director independence qualifications, diversity and training could be further improved. Enhanced transparency in the monitoring of corporate governance practices could strengthen investor confidence and oversight.
Recommendations: Authorities could strengthen Thailand’s capital market by empowering the stock exchange, investors and other market participants through greater director accountability and improved institutional coordination. Enhancing the SEC’s independence and separating the Stock Exchange of Thailand’s regulatory and commercial functions would reinforce oversight integrity. Streamlining enforcement - particularly in investigations and decision-making on corporate governance and market issues - would strengthen trust. Revising the Corporate Governance Code and increasing transparency in monitoring practices, together with tighter controls and disclosure on related party transactions, would enhance investor protection. Finally, board independence should be strengthened by formalising nomination processes, enforcing tenure limits, and improving director qualifications through targeted education initiatives.
Boosting access to the public equity market. The Thai stock market experienced a solid flow of new issuers during the period 2012-2022, but recently new listings have decreased. The issuance process is stricter and lengthier compared to other large ASEAN countries. The growth company market is smaller compared to some ASEAN peers and Thailand lacks small-cap issuers. Requirements for the second- and third-tier boards also reduce their attractiveness to potential issuers. Market liquidity is limited to a subset of listed companies and has been declining.
Recommendations: Authorities could consider committing to a shortened approval timeline for equity issuance, as well as allowing simplified filings and a shorter timeline for secondary equity offerings. Adopting a sponsor-driven model for the Market for Alternative Investment (mai) and allowing a simplified prospectus could improve SME access to capital. The regulator and exchange could also allow direct listings on the mai and LiVE Exchange (LiVEx) to increase accessibility and provide exit opportunities for investors. Enhancing visibility of listed companies through independent research could support liquidity. Additional steps could involve introducing market-making incentives and phasing out non-free float-adjusted indices.
Facilitating market-based long-term financing via corporate bonds. Thailand’s corporate bond market is the largest in the ASEAN region. At the end of 2024, retail investors held 40% of outstanding amounts and foreign investors less than 1%. Covenants are relatively weak. Although a standard issuance template exists, provisions are often significantly weakened, and market participants question whether retail investors properly take this into account. The resolution of defaults is also cumbersome given a challenging out-of-court framework, slow court proceedings and rehabilitation processes. There is also a lack of clarity with respect to the ability to trade claims of defaulted bonds.
Recommendations: Reforms could include revising the criteria and process for becoming an accredited investor, clarifying the legality of claim transfers and ensuring that transfers cannot be easily overturned in court. Measures to boost SME access could be introduced, such as expanded guarantees, subsidised ratings, securitisation, simpler disclosures and tax incentives.
Mobilising private capital markets. Private equity and venture capital ecosystems in Thailand remain underdeveloped compared to regional peers, with particularly limited early-stage funding. The market is dominated by corporate venture capital and scarce exit opportunities reduce its overall attractiveness. While the authorities provide some funding support, these efforts remain modest relative to more developed ecosystems. High-quality accelerators and incubators are limited, and frameworks for commercialising university research are cumbersome. In addition, existing legal fund structures may be suboptimal, and restrictive regulations on employee stock options, preference shares, convertible debt, treasury stock and personal bankruptcy further constrain venture capital activity.
Recommendations: Authorities could expand equity-matching and grant schemes for seed and early-stage funding through streamlined processes, and establish a government-backed VC fund to co-invest with private investors. A single entity could be tasked with coordinating initiatives and implementing a national strategy to further develop the market. Promoting high-quality incubators and accelerators with experienced staff, along with clearer frameworks for commercialising university-generated intellectual property, would further support innovation. Finally, updating regulations on fund structures, employee stock options, financing instruments and bankruptcy laws would strengthen the overall venture capital ecosystem.
Increasing the role of institutional investors. Institutional investors’ assets have grown significantly over the past decade, reaching 88% of GDP in 2024. However, pension coverage and voluntary scheme participation remain modest, and asset allocations are more conservative than in other Asian jurisdictions. While the insurance industry is large by regional standards, conservative investment strategies persist. Low adoption of unit-linked products, combined with strict risk-based capital rules, investment limits and hedging requirements, restrict insurers’ participation in capital markets. Investment funds remain heavily weighted towards fixed income and the industry’s dominance by banks limits competition. The exchange-traded fund market is still nascent and lacks scale, which keeps costs high.
Recommendations: Authorities could consider introducing mandatory enrolment with an opt-out option in provident funds to raise coverage in asset-backed occupational pensions. Fintech-based micro-saving schemes embedded in daily spending could be promoted to boost voluntary contributions. Pension funds could use flexible regulatory limits to shift their portfolios towards higher-return assets, supported by strategic allocation ranges and benchmarks. Reviewing insurance investment and solvency rules could ease constraints, expanding investment options under safeguards and strengthening the regulator’s independence and supervisory capacity. Targeted educational campaigns could be introduced to encourage long-term investment behaviour and strengthen financial literacy, and broaden non-bank distribution channels for ETFs.
Strengthening household savings and financial resilience. Financial assets make up only 10% of households’ financial assets and investment securities only 5% of these financial assets. Cash, savings accounts and community savings groups remain key savings channels. Tax-incentivised products boost investment but have historically required relatively long lock-in periods. Persistently high household debt has limited savings, credit scoring coverage and use is low, and financial literacy shows significant gaps.
Recommendations: Retirement mutual funds could be made more flexible by allowing contribution pauses during periods of financial hardship. Savings schemes could be better targeted to younger generations by reflecting their needs and preferences. Credit reporting could be expanded to include a wide range of institutions. Providing consumers with regular credit summaries and integrating credit information into routine services could help raise consumer awareness and promote more informed financial behaviour. These efforts could be complemented by a nationwide education campaign on credit scores and responsible borrowing. Further efforts should be taken to improve financial literacy.
