Public equity sales for social enterprises soon
The Securities and Exchange Commission (SEC) is in the process of issuing a regulation for social enterprises to raise funds in the capital market by offering equity sales to the public.
The idea is for social enterprises to offer equity sales without having to file investment information with the SEC, said secretary-general Ruenvadee Suwanmongkol.
The requirements for social enterprises to raise funds in the capital market are transparency, accurate accounting standards and good business management, said Ms Ruenvadee. These enterprises must be approved by the Social Development and Welfare Department.
The regulation is expected to take effect this year. On Sept 5, the Capital Market Supervisory Board approved in principle the move for social enterprises to raise funds in the capital market for the development of community, society and the environment.
Under the Community Enterprise Promotion Act of 2019, social enterprises can make dividend payments of a maximum of 30%, while 70% can be used for social and community benefits.
The proposal to allow social enterprises to raise funds from the public came about because they cannot access the primary market via listing on the Stock Exchange of Thailand index as they cannot meet the listing requirements, said Ms Ruenvadee.
A source from the SEC, speaking on condition of anonymity, said the market regulator is studying a plan to support small companies gaining easier access to fundraising in the capital market.
The plan aims to allow small companies to raise funds from a classified groups of investors, such as venture capital or private equity firms, said the source.
The SEC will also cooperate with the SET for investors' exit strategies, said the source.
A study is being discussed to identify the best platform for this kind of transaction to occur. The fundraising regulation and related conditions are expected to be issued next year.