The Finance Ministry has given the green light for setting up a third stock exchange as a fundraising platform for startup businesses, with operations expected to commence in next year’s first quarter.
“Foreign countries, such as Indonesia and Singapore, already have this kind of stock exchange, which is considered part of startup incubation,” said Finance Minister Uttama Savanayana.
“The move will facilitate startup business operators to gain appropriate access to funding and suitable investors,” Mr Uttama said after yesterday’s meeting with the Capital Market Development Fund’s board of governors on devising a development strategy for Thailand’s capital market.
In December 2019, media reports said the Securities and Exchange Commission (SEC) and 12 organisations had agreed to set up a new equity exchange for trading shares of small and medium-sized enterprises (SMEs) and startups to help them raise funds in the capital market.
Although one possibility is for listings to have no minimum paid-up capital, the SEC is considering having an independent advisory body and auditing committee or adhering to international accounting standards as requirements, among other criteria.
Thailand has two stock exchanges, the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (MAI).
In general, listing on the SET requires paid-up capital in common shares after public offering worth at least 300 million baht and the MAI requires at least 50 million baht.
Mr Uttama said capital market regulators and related organisations will work together to help develop a fully digitised infrastructure platform for the Thai capital market.
Under the plan, business operators will be able to issue securities with low capital cost, while information on products and services will be fully integrated into a digital platform.
A pilot project associated with issuing digital bonds with starting prices of 50-100 baht will also commence in the third or fourth quarter this year by the Public Debt Management Office (PDMO).
“This is not new bond issuance, but rather within a loop of issuance,” Mr Uttama said. “An initial credit limit is set at around 5,000 baht, the same amount issued by the PDMO, where the office issues bonds twice a year for 5,000 per round.”
SEC secretary-general Ruenvadee Suwanmongkol said the new regulations and conditions for issuing new Super Savings Fund (SSF) units will be announced on March 16.
Asset management firms can start applying for new SSF unit issuance starting next Monday. The SEC will waive establishment and fund registration fees for asset management companies.
Unit distribution is stipulated to begin on April 1 and end on June 30. The lock-up period is at least 10 years.