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SEC reveals conclusions of the SMEs-startups working group; Criteria for secondary markets finalized



Thursday 19 December 2019 | No. 187 / 2019


Bangkok, 20 December 2019 - SEC revealed the conclusions obtained from a meeting on 19 December 2019 with the “SME Startup PE VC” working group, chaired by SEC Deputy Secretary-General Sirivipa Supantanet. The criteria for fund mobilization by SMEs and startups and the form of trading on secondary markets were finalized. A special focus was given on a balance between rules that do not impose an unreasonable burden to businesses and protection for investors.

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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