SEC held the second meeting with
the “SME Startup
PE VC” working group, set up to promote access to the Thai capital market by
small- and medium-sized enterprises, startups, private equity firms, and
venture capital firms, on 19 December 2019. Methods for fund mobilization and trading
of shares of SMEs and startups on secondary markets were discussed. Conclusions
from said discussion are as follows:
1.
SMEs and startups are required to be limited
companies or public limited companies with good governance, and their directors
and executives must meet the specified qualifications.
2.
They will be required to disclose the
information as required by SEC, and submit half-yearly and annual financial
statements audited by auditors of auditing firms certified by SEC.
3.
Investors entitled to trade on secondary
markets must be:
3.1
Institutional investors, private equity firms,
venture capital firms, and angel investors; and
3.2
General investors with knowledge and
understanding of SMEs and startups, having the minimum amount of income or
financial status as specified by SEC, provided that they purchase these shares
through an intermediary, who will conduct KYC and Suitability tests in order to
protect investors.
4.
Funds investing in shares of SMEs and startups
will be established. These funds will be administered and managed by experts in
investments in SMEs and startups. They may be listed on the stock market to
allow general investors to invest.
SEC Secretary-General Ruenvadee Suwanmongkol,
stated that “The ‘SME Startup PE VC’ working group is in line
with the government policy to promote the development of the foundation economy,
as well as SEC’s strategy plan to integrate collaboration among all sectors. SEC
will consider the information obtained from this working group about methods
for fund mobilization and the trading of shares of SMEs and startups on
secondary markets, as well as the qualifications of investors entitled to
invest on secondary markets, when drafting the relevant rules that will add
alternatives for SMEs and startups to access funds through the capital market. It
is expected that these rules will be finalized in the first quarter of 2020.”
The “SME Startup PE VC” working group comprises
representatives from various government and private agencies, i.e. the Fiscal
Policy Office; the Office of Small and Medium Enterprise Promotion; the
Department of Business Development, Ministry of Commerce; the Department of
Industrial Promotion, Ministry of Industry; the Stock Exchange of Thailand;
Small and Medium Enterprise Development Bank; the Bank for Agriculture and
Agricultural Cooperatives; the Joint Standing Committee on Commerce,
Industry and Banking; the Federation of Thai SME; the Thai Venture Capital
Association; the Investment Banking Club; the Federation of Accounting
Professions under the Royal Patronage of His Majesty the King; and the
Federation of Thai Capital Market Organizations. At this meeting, representatives
from the Federation of Thai Capital Market Organizations also
attended.
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