SEC AIMS TO TRIPLE PH CAPITAL MART ISSUERS BY 2024
The Securities and Exchange Commission (SEC) seeks to deepen the local capital market by growing the roster of corporate issuers to 888—over three times the pool of companies listed on the Philippine Stock Exchange (PSE) to date—by the time the regulator celebrates its 88th anniversary in 2024.
The SEC targets small and medium enterprises (SMEs), which account for 99 percent of all businesses in the country, to constitute bulk of new capital market issuers. To shepherd these SMEs, SEC chair Emilio Aquino announced the establishment of the Office for the Advancement of Strategic Investments in SMEs (Oasis).
‘Oasis’
In a speech during the PSE’s “Road to IPO” (initial public offering) forum targeting SMEs last week, Aquino said the formation of Oasis was in line with the SEC’s goal to make the capital market as a viable alternative to raising capital for SMEs, simplify capital-raising products and streamline the registration processes for SMEs.
Aquino vowed the SEC would also encourage investment houses and other financial institutions to conceive and implement SME-friendly underwriting and advisory program.
The SEC also plans to engage the likes of Asian Development Bank and International Finance Corp. to launch SME-focused investment funds.
Fundraising options
To date, only 272 out of 700,000 active corporations in the country have brought their shares to public hands.
But the route of selling common or preferred shares and listing them on the PSE is just one way for companies to tap the capital market. During the same forum, SEC Markets and Securities Regulation Department director Vicente Graciano Felizmenio Jr. talked about crowd-funding and private placement as alternative options to raise equity.
In 2019, the SEC issued the rules on crowd-funding, giving leeway for startups and SMEs seeking to raise up to P50 million. Private placement, on the other hand, is a fund-raising activity that is directly negotiated with the sources of funds, such as qualified investors or those that are exempt from SEC registration requirement to purchase funds or securities locally or abroad because the assumption is they are familiar with their investments.