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SEC-DBD jointly promote “crowdfunding” as an alternative funding option

     Bangkok, April 2, 2015 –The SEC and the Department of Business Development (DBD) of Ministry of Commerce have jointly promoted “crowdfunding” as an alternative fundraising channel for small and medium-sized businesses (SMEs) and startups. Crowdfunding will help widen access of those businesses to lower cost sources of finance, which will support their business strengths for the age of AEC and international connectivity.

    Vorapol Socatiyanurak, SEC Secretary-General said, “In Thailand, SMEs account for 95 percent of all businesses and generate over 50 percent of employment. As such, they are vital to the creation of jobs and incomes, and certainly a fundamental part of the country’s economic development.  Accordingly, it is important to facilitate SMEs and startups, especially those related to science, technology and innovation, to gain convenient access to capital with low cost in order to boost their strength and growth.

     Crowdfunding is an alternative fundraising channel enabling those businesses more access sources of finance where they can raise fund from the crowd, each of them makes investment with small amount of money through the provider of internet-based system, called crowdfunding portal. Apparently, in 2014, there was a drastic growth of fund raising through crowdfunding worldwide worth about 6 billion US dollars. 
     The SEC supervises equity-based crowdfunding where investors’ fund is invested in return for shares issued by the fundraiser.  The Capital Market Supervisory Board recently approved in principle the equity-based crowdfunding regulations to allow public limited companies and limited companies to raise fund through crowdfunding portals approved by the SEC. The crowdfunding portals will screen the companies intending to raise fund through their facilities; require such companies to disclose relevant information; and provide mechanism for proceeds obtained from share subscription.  For investors, they must become members of the crowdfunding portals to gain access share offering information and, prior to making investment, must pass knowledge test on risks associated with the investment. In case of retail investors, each investor is allowed to buy shares not exceeding 50,000 baht per company and not exceeding 500,000 baht during the 12 month-period. Moreover, they can cancel shares subscription at any time, except the remaining of offering period is less than 48 hours.

      First from left.Pongpun Gearaviriyapun, DBD Director-General
Second from left.Vorapol Socatiyanurak, SEC Secretary-General

     Pongpun Gearaviriyapun, DBD Director-General said, “The Department of Business Development (DBD) has one important objective; making Thai businesses achieve quality standards, strengths and competitiveness. Presently, there are more than 600,000 business-entities registered and operated nationwide. Crowdfunding; an innovative fund-raising facility, is an alternative financial source for business-entities. To utilize the benefit of crowdfunding, the business-entities should be legally established, efficiency managed, and highly transparent. These key factors will enhance the trustworthy of the entities from the fund-providers point of view.
     On behalf of the DBD, I genuinely appreciate this opportunity to work hand in hand with the SEC building up strength and competitiveness for Thai business-entities in the world arena.”