SEC’s strategic plan for a better Thai Capital Market amid challenges
Addressing participants at the recent Thai Securities and Exchange Commission (SEC)’s 3-year (2020-2023) Strategic Plan Forum, the SEC’s Secretary-General Ruenvadee Suwanmongkol spoke at length about the need for regulatory bodies to achieve the collaboration of all stakeholders and to work together towards the future of Thai Capital Market and the financial well-being of Thais. This cooperation was particularly important in the context of the global and domestic challenges in economics and trade, technology disruption and cyber resilience, environmental and sustainable development, the growing ageing society along with such external uncontrollable factors as COVID-19 and political and socio-political impacts if the visions of Thailand’s 20-year National Strategy (2017-2036) to become a nation of ‘Stability, Prosperity, and Sustainability’ and those of other Thai Financial Master Plans and government policies were to be achieved.
The 8 dimensions on which SEC aims to focus to bring about success and improvement in the Thai capital market are as follows:
1 Security, stability and cybercrime conduct
2 Financial literacy and long-term saving
3 Financial mobilization to support SMEs growth
4 Governance and sustainable business
5 Technology and innovation for infrastructure development
6 Standardized laws and regulations to facilitate the overall capital market
7 Connectivity with other countries
8 SEC as an organization of excellence with efficiency and good governance
Priority is now being given to building an ecosystem for a sustainable capital market, encourage accessibility and provide investors protection and education. Sirivipa Supantanet, SEC’s Deputy Secretary-General, noted that Thai SMEs have more creative and innovative ideas to do business but lack access to funds at reasonable cost for sustainable growth. Records show that Thai SMEs account for 43.6 per cent of overall Thai GDP while in terms of numbers, SMEs represent 99 per cent of total enterprises in Thailand. There is plenty of room for growth if they are well-educated in financial matters and enjoy the full support of government agencies and value-chain stakeholders. SEC has continuously prepared to upgrade and develop a platform-based information center that would allow investors and issuers accessibility to capital market products and services and this will be gradually ramped up by Q2/2020 and fully implemented by 2021. Free training modules are offered to interested members of the public and this will help increase the number of professionals, reduce the cost of fund raising and promote disclosure-based information and segmentation.
For SMEs or startups, one of alternative methods for raising money is through crowdfunding either of the equity or debt type. Key benefits to the SMEs’ founders are gaining access to new financing at lower cost compared to traditional bank financing and raising their own capital, no tangible assets as collateral, exploring new investors and customer bases, promoting brand awareness, and controlling majority votes and operational decision making. In a recent development, SEC has successfully worked with Department of Business Development on amending Securities Laws for SMEs to allow them to offer shares to new investors in form of convertible debentures with a capped 10 investors and not exceeding Bt20 million offering fund size. Adequate disclosure is required but this move will reduce unnecessary procedures and costs. Another move is to relax SEC’s regulation on debt crowdfunding from all-or-nothing to the 80-per-cent fund raising requirement to help facilitate potential transactions.
SEC also organized the ‘Fintech for SMEs and Startups’ event that saw experienced entrepreneurs sharing their stories and explaining how to apply financial technologies in business as well as a business matching session that allowed interested parties easy access to fund mobilization with fintech solutions and value creation from business partners. One of interesting key notes over ‘The Journey toward Digital Era’ by guest speakers from various sectors involves key success factors in becoming real SMEs in the digital economy: (i) ‘keep going’ entrepreneurship mindset with good business plan and marketing communication; (ii) well-prepared inhouse operations and human resources; (iii) loyalty and trust of all stakeholders; (iv) continuous developments in content and distribution channels both offline and online; and (v) fast and energetic operations to tackle consumers’ fast-changing lifestyles and market conditions.
For further enquiries, you can contact 24/7 Financial Clinic or SEC’s Help Center Tel. 1207