TACLOBAN CITY (PIA) — Micro, Small, and Medium-sized Enterprises (MSMEs) and start-up companies that attended on December 7 the Security and Exchange Commission (SEC) roadshow about capital formation can now tap the capital market and crowdfunding platforms to expand their businesses.
Crowdfunding, an alternative to traditional loans, uses the internet to solicit public funds for start-ups and small businesses to execute affordable projects while retaining initial value and control.
These crowdfunding activities in the country are regulated with the Rules and Regulations Governing Crowdfunding provided under SEC Memorandum Circular No. 14, Series of 2019.
The SEC established the Office for the Advancement of Strategic Investments in SMEs (OASIS) to promote alternative financing options by accessing funds in the capital market.
Likewise, Investree Philippines, SeedIn Technology Inc., and the Eastern Securities Development Corporation (Round One) are SEC-licensed crowdfunding intermediaries that help facilitate transactions involving offering or selling securities through a crowdfunding portal.
“We want to introduce you to the different sources of money within the capital market. This will be your aspiration. Conduct an initial public offering and have your company listed on this stock exchange because there are a lot of benefits for going after this,” said SEC Director Vicente Graciano Felizmenio Jr.
According to crowdfunding regulations, business enterprises are no longer required to register securities with or obtain direct approval from the SEC to seek investments from the public.
In addition, business enterprises are advised to conduct their fundraising operations through a crowdfunding intermediary, funding portal, or crowdfunding platform officially registered with the SEC.
An entrepreneur has the potential to raise a maximum of P10 million within 12 months by offering and selling its securities to any investor. If the securities are offered and sold exclusively to qualified investors, the entrepreneur can raise P50 million.
Michael Cubio, a SEC-registered business owner of an internet café in San Jose, Tacloban City, has seen the potential of expanding his business through crowdfunding and his positive impression of the roadshow.
“I lack enough funds to provide the high-end workstations I need in my business. This event has given me enough knowledge of where to get funds without having difficulties with the requirements. I’m thankful that they conducted this kind of event,” Cubio said in the waray-waray dialect.
Meanwhile, the SEC also introduced the newly launched Call a Friend and Engage with SEC (CAFÉ SEC), a follow-through initiative to the SEC roadshow. The CAFÉ SEC is a weekly online business-to-business meeting between the SEC-registered crowdfunding intermediaries and the Philippine Stock Exchange that provides additional information on capital market-based products and services to interested enterprises. (MMP/AAC//PIA Leyte)
