SEC launches SME board for small and medium companies
The Securities and Exchange Commission of Sri Lanka ( SEC) together with the Colombo Stock Exchange ( CSE) is launching "Empower" - the SME Board to attract Small and Medium Enterprises (SMEs) to the CSE, on July 5.
Under a programme to launch a series of new Capital Market Development Initiatives proposed by the new SEC Chairman, Ranel T Wijesinha, this launch, will for the first time in the history of the country and the history of the SEC and CSE, establish a dedicated platform for the SMEs, the SEC said in a media release.
Describing the background and rationale for the SME Board, SEC Chairman SEC Mr. Wijesinha said, “Sri Lanka, has achieved considerable progress in many areas, within a South Asian context, but it is yet an Emerging Economy in the larger Asia Pacific region, within which it can be a truly formidable player. We have yet to realise our full potential and we have been saying this for too long. But growth must be balanced, growth must be honest and wholesome and most importantly, sustainable. If we are to achieve economic growth with equity, across the length and breadth of the country, with bal- ance in economic development and employment, between the city and the rural village and between agriculture, industry and services, and among and between representatives of religions and communities, there is a compelling national imperative the country has to address.”
He said: “That national imperative is to usher in, an economically strong, politically stable, socially responsive, Sri Lanka. Within that context, there is an imperative, that we develop the Small and Medium Enterprises sector- the SME sector.”
CSE Chairman Ray Abeywardena expressed his great appreciation that the SEC was keen to fast-track the launch of the SME Board. "If you are an SME, you understand that access to finance is a key constraint to growth and that access to formal credit can at times be challenging. The critical challenge of funding also brings about other challenges, including the lack of access to market information, technology and the lack of quality talent to drive the organisation. An increasing number of SMEs as a result, are considering the pros and cons of accessing versatile methods of financing, and are looking beyond conventional credit," he said.
The SME Board will offer a new avenue to drive Sri Lankan SMEs through their next phase of evolution, by offering a unique proposition and an opportunity to access a deep pool of international and domestic capital. Apart from access to capital, the new listing platform will offer SMEs opportunities to build credibility through disclosure of information and balanced governance standards, which would enhance their visibility and attract strategic investors.
Companies listing on this platform will be offered guidance during the listing process by both the CSE and an independent sponsor, and will continue to engage in post listing support provided through a range of one-on-one meetings, awareness sessions, compliance monitoring reviews and public consultations, Mr. Abeywardena said.
The SEC has designed a series of strategic initiatives, which will be operationalised simultaneously with the launch of the SME Board. They are:
An invitation to all public and private sector banks to identify, guide and assist existing customers, potential SME Public Listed Companies (PLCs), to seek equity funding, through a listing on the SME board.
An invitation to all apex, national and regional chambers to nominate and assist potential SME PLCs.
An invitation to all accounting and auditing firms, consulting and other firms to introduce and assist potential SME PLCs. A special invitation to the Small and Medium Practitioners- the SMPs individually, or through the formation of consortia, to assist SMEs in developing prospectuses.
An invitation to multilateral and bilateral development partners such as the World Bank, the Asian Development Bank, Japan International Cooperation Agency and other institutions to partner the SEC-CSE SME initiative. Mobilisation of island- wide “domestic” roadshows where teams of the above will travel to key cities in the north, south, east and west of the country to popularise the initiative and to facilitate listings. Establishing, clusters of SEC and CSE staff who will be deployed to expedite answers to questions, clarifications, and approvals of prospectuses.