InfoQuest (November 14, 2019) -- Ms. Chomkwan Kongsakul, assistant secretary general of the Securities and Exchange Commission (SEC), publicized an article titled "Opening the door of capital market for SMEs quickly and prudently". In the article, she pointed out that SEC, as a government institution, is responsible for supervising and growing Thailand's capital market, and opening the door of capital market for SMEs, making capital market become a financing choice for varied sizes of enterprises in a real sense and protecting the interests of investors; therefore, SEC should work with other departments to analyze the problems and obstacles facing SMEs and come up with proper measures, so as to realize a balance between financiers and investors.
Over the past six months, SEC has communicated with 12-plus government and private institutions related to SMEs development, including the Office of Small and Medium Enterprises Promotion (OSMEP), Bank for Agriculture and Agricultural Cooperation (BAAC), and the Federation of Thai SME, analyzing problems and limitations, and formulating various measures to resolve obstacles.
Those measures include: establishing working groups for SMEs development, venture capital, joint venture, and enterprise listing; those working groups will formulate relevant policies, directions, and targets in promoting and supporting SMEs to enter capital market. After discussion, they found that many factors have hindered SMEs in entering capital market. For instance, SMEs are unaware of the interests of capital market or the necessity of entering capital market; they have no access to relevant information of financing in capital market; the most important one - relevant regulations and rules have not facilitated SMEs in financing.
Therefore, SEC has formulated a plan in promoting and supporting SMEs in entering capital market. The plan has been approved by SEC Board of Directors and facilitated the implementation of many works. To be specific:
1. Seminars and activities have been hosted in each province to offer information of financing in relevant capital markets, and relevant channel information of financing via capital markets to SMEs, making enterprises in each province understand the benefits of entering capital market; they explained the basic preparations for entering capital market; special working groups have been formed to offer suggestions to enterprises interested in acquiring financing via capital market. From September to November in 2019, SEC has launched an event "SEC Reaching out to Localities" in Khon Kaen, Udon Thani and Chiang Mai, with about 500 people participating in. Besides, SEC has worked with BAAC, the Department of Industrial Promotion, and other institutions to launch seminars, offering information of financing via capital market to agricultural and industrial enterprises.
2. They have compiled relevant draft standards and prepared to host hearing to solicit opinions on SMEs financing. In this way, limited companies among SMEs can sell stocks and convertible bonds to investors and employees, so as to raise funds conveniently and bring in more employees with potential. SEC and the Department of Business Development (DBD) have discussed on measures about how to revise relevant laws and regulations to make financing more convenient and easier for SMEs. Those measures are being deliberated by the Office of the Council of State.
For SMEs defined as medium-sized enterprises by OSMEP, SEC will work with SET to deliberate on IPO standards and securities custody standards to make them fit the sizes and types of SMEs.
3. They have worked out relevant plans of developing SMEs investment channels in the form of funds or trusts, aiming to offer choices for investors interested in making investments in SMEs. However, since SMEs are small in size and come with more investment risks compared with public limited companies listed in SET, SEC is considering limiting the types of investors in line with the nature of investment risks.
Meanwhile, SEC has taken other actions to support SMEs in entering capital market effectively. For instance, SEC and the Department of Industrial Promotion have signed a memorandum of cooperation to enable SMEs under the supervision of the Department of Industrial Promotion to access financing in capital market.
Though it takes time to see the concrete results of those measures, those measures, if they can break down barriers and open the door of capital market for SMEs in a real sense, will certainly make capital market play a role in promoting national economy.
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