Bangkok, 2 November 2022 – The Securities and Exchange Commission (SEC) has revised the regulations related to issuance and offering for sale of securities of small and medium-sized enterprises (SME) to promote financing of the private sector and increase investors’ access to investment products.
The SEC has amended the regulations related to SME fundraising via private placement or PP-SME* to further promote financing of the private sector. In this regard, limited companies whose size is bigger than that of SME pursuant to the Law on SME Promotion (for example, a company with revenue more than 300 million baht in the trading and service businesses) are eligible to raise fund by issuing and offering shares or convertible debentures for sale in a private placement in the same manner as the SME case while specifying more measures for investor protection. For example, a business must seek the shareholders’ resolution of approval to issue shares in sufficient support of the exercising of the conversion right before issuance for sale of convertible debentures, etc.
In addition, the SEC has revised the wording in the Notification related to the Issuance and Offering for Sale of Securities of SMEs in consistent with the investor definitions under the Notification on Determination of Definitions of Institutional Investor, Ultra-high Net Worth Investor and High Net Worth Investor or the central investor definitions** for investment in financial products under the SEC’s supervision, which has been revised and has become effective since 1 October 2022. This is to enhance investors’ knowledge and understanding of the characteristics and risks of the products, and build the ability to accept risks and access a more variety of financial products. Concurrently, businesses wishing to raise more capital are able to do so through wider fundraising channels. The revised regulations related to the issuance and offering for sale of securities of SMEs above have been published in the Government Gazette and have become effective as from 1 November 2022.
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Remarks:
*The PP-SME is a fundraising alternative for small and medium-sized enterprises whereby SMEs may issue shares or convertible debentures for sale in a private placement without the need to file an application for approval or the registration statement with the SEC Office.
** Notification of the Securities and Exchange Commission No. Kor Jor. 39/2564 Re: Determination of Definitions of Institutional Investor, Ultra-High Net Worth Investor and High Net Worth Investor, dated 24 December 2021. https://publish.sec.or.th/nrs/9265p_r.pdf.