SEC to set up exchange for trading shares of SMEs, startups

SEC to set up exchange for trading shares of SMEs, startups

The Securities and Exchange Commission (SEC) and 12 organisations have agreed to set up a new equity exchange to trade shares of small and medium-sized enterprises (SMEs) and startups to facilitate access to fundraising in the capital market.

The regulator and the SME Committee representing various business factions held a meeting yesterday to finalise details of the new exchange related to trading model, listing criteria and investor types.

The SEC has already finished drafting the project and a conclusion with the SME committee is expected to be reached soon.

Once a conclusion is reached, the SEC's board of directors will study the project and a public hearing will be held before the new equity exchange materialises.

One possibility is for there to be no minimum paid-up capital, but the SEC is considering having an independent advisory body and auditing committee or adhering to international accounting standards as requirements among the criteria, said SEC assistant secretary-general Jomkwan Kongsakul.

The new exchange will likely merge with Live, a blockchain-integrated electronic crowdfunding platform launched last year for SMEs and startups to raise funds, Ms Jomkwan said.

The new equity exchange will be organised and run by the Stock Exchange of Thailand (SET).

Managed by SET subsidiary Live Fincorp Co, Live's investors include institutional entities, private equity, venture capital and accredited investors with at least one year's experience and annual income exceeding 4 million baht, or with assets worth 50 million baht. Retail investors are not allowed to trade on the platform.

Live has so far failed to complete the fundraising process for the first two crowdfunding projects because the projects couldn't complete the minimum requirement for funding amount stipulated at 20 million baht. The projects will have to return the raised funds to investors.

The SET temporarily shut down the Live crowdfunding platform in a bid to make necessary adjustments.

The SEC has so far permitted two crowdfunding portals to operate. Besides Live, Sinwattana equity crowdfunding is another operating portal with a policy to raise funds for all types of investors, according to Ms Jomkwan.

When crowdfunding projects become larger, they can list on the new equity exchange, she said.

The Industrial Promotion Department has selected about 80 SMEs with strong potential and an average paid-up capital of 10 million baht, Ms Jomkwan said.

Of these, 10 have paid-up capital of 50 million baht each and could be the first 10 firms ready to be listed on the new equity exchange.

But SMEs and startups still face hurdles to having their securities listed because the SEC will examine investor prospects and inherent risks, Ms Jomkwan said.

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