A new stock exchange to trade shares of small and medium-sized enterprises (SMEs) and startups is expected to be launched in the third quarter next year, says the Securities and Exchange Commission (SEC).

The unnamed stock exchange will be a new securities trading platform under the supervision of the Stock Exchange of Thailand (SET).

The objective is to support SMEs to gain more access to capital market funding resources and complete the capital funding ecosystem, said SEC secretary-general Ruenvadee Suwanmongkol.

The new bourse will still require the rules and regulations embedded in the primary market in terms of funds raised through initial public offerings, though the listing rules will be more relaxed than the SET and Market for Alternative Investment indices, said Ms Ruenvadee.

The SEC expects to announce the rules and regulations for the new exchange within the first half of 2021.

For the general rules of securities qualification, prospective companies must be classified as SMEs as defined by the Office of SMEs Promotion regarding the annual revenue framework of each business type.

For instance, an SME operating in the real sector seeking to be listed should have annual revenue of 300-500 million baht.

But the SEC will not require a minimum revenue or profit of a company to list, except in cases where a firm has a strong business presence and large shareholding structure. Nevertheless, SMEs are required to comply with disclosure criteria and preparation of accounting standards.

On the investor side, the SEC will allow institutional investors, venture capital, private equity and knowledgeable high net worth investors to invest in the exchange.

For preparation to list on the new exchange, companies can be restructured through venture capital or crowdfunding platforms, where the SEC is building an ecosystem to support capital market funding for SMEs, said Ms Ruenvadee.