SME trading board likely to launch in final quarter

SME trading board likely to launch in final quarter

An SME board, a sub-board for the listing of small and medium-sized enterprises, is expected to be unveiled by the fourth quarter, with nine or 10 listed companies initially.

There are 20,000 to 30,000 potential companies for the SME board, but most need to lift their accounting standards to meet regulations, said Vorapol Socatiyanurak, secretary-general of the Securities and Exchange Commission (SEC).

It will take a year or two for them to improve their accounting processes, he said.

Mr Vorapol said many companies were ready to go public and list on the new board after taking part in the SEC's "IPO: Pride of the Provinces" programme.

As the SME board is open to all companies nationwide, they can use this channel for fund mobilisation.

"SMEs are the backbone of the economy. If we can help them to raise funds for expansion, their operating costs will be reduced while market competitiveness will be sharpened. This will also help the country's economic growth in the long term," Mr Vorapol said.

However, listing costs are quite high, so the SEC will help them find suitable financial advisers and accounting firms to keep costs low.

Mr Vorapol said only cash trading will be allowed initially for investors trading stocks on the SME board to mitigate risks of both investors and stock brokerage houses.

He earlier said only accredited investors with a good knowledge of trading risks would be allowed to trade.

Prapan Charoenprawatt, president of the Market for Alternative Investment, said the regulator must consider how to support companies listed on the SME board and how to protect investors.

"If we want to maintain the quality of listed firms, we must adhere strictly to listing requirements. But the problem is it is costly for SMEs, especially costs for hiring financial advisory firms. If we need to see trading liquidity, we have to allow retail investors to invest in this board, but we have to ensure they are well aware of such investment risks," he said.

The Stock Exchange of Thailand is in talks with the SEC about permission for SME-listed companies to report their financial statements twice a year instead of quarterly to lower their costs.

They also need to determine whether the number of financial advisory and auditing firms is enough to cope with SME listings.

"The SET hopes to help SMEs to have more fund-raising options through opening the new trading board. However, there are only some details of listing costs and few auditing firms that can audit SMEs' balance sheets with reasonable prices," said Mr Prapan.

Do you like the content of this article?
COMMENT