THURSDAY, March 28, 2024
nationthailand

SEC hopes crowd-funding platform |to kick off by the year-end

SEC hopes crowd-funding platform |to kick off by the year-end

CROWD-FUNDING is expected to kick off to help start-ups and very small entrepreneurs access capital by the end of this year, as a tool to help boost the economy and as an alternative for investors.

Regulations for equity crowd-funding, which is a platform to help small companies raise funds from people via social networks online, were announced by the Securities and Exchange Commission in May.
Sarica Apiwatthakakul, director of the intermediate licensing and SME financing department at the SEC, told reporters yesterday that the department was considering three or four enterprises as operators of equity crowd-funding portals.
“We want to see crowd-funding happen by the end of this year after the SEC has worked on this matter for two years,” she said, adding that more details would be announced later. 
She said companies that wanted to utilise equity crowd-funding would be allowed to raise funds not exceeding Bt20 million in the first year, and after that not more than Bt40 million for their l-fetime.
As this platform is highly risky, Sarica said that initially the regulations would limit investors to Bt50,000 per company and a maximum of 10 companies – for a combined amount not exceeding Bt500,000 – at the same time. 
Aekkasit Diewwanit, chief executive officer and co-founder of the Dreamaker crowd-funding group, said the company was ready to apply to the SEC to be an equity crowd-funding portal. 
He said the company had about 10 clients who wanted to raise funds through the crowd-funding platform, mostly in the healthcare, food, website, and digital industries. The amount of funds required ranged from Bt5 million to Bt15 million.
Aekkasit said the company would charge about 5 per cent of total funds if the amount exceeded Bt10 million. 
Jason Best, principal of Crowdfund Capital Advisors, who outlined the structure of crowd-funding platforms for the US and is also an adviser for crowd-funding in more than 30 countries, suggested that crowd-funding would be an opportunity for Thai entrepreneurs and good for the country’s economy. 
He added that Thailand could be a leader for crowd-funding in Asean.
Malaysia already has crowd-funding regulations and has licensed six portals, but there is yet to see any successful fund-raising campaigns by issuers.
In China, the funds raised by crowd-funding this year are expected to reach US$6 billion (Bt210 billion), up from $3 billion last year, even though that country still lacks regulations for this fund-raising technique, Best said.
In the United States, he said crowd-funding was expected to reach $33 billion this year, double the $16 billion raised in 2014. The cost of funds raised via crowd-funding in the US is about 7-10 per cent of the amount needed. While traditional funding techniques take six to 12 months, crowd-funding can take less than 90 days.
 
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