SEC public hearing on proposed regulations to allow SMEs and startups to offer sustainability-themed bonds via crowdfunding and private placement
Today, sustainability – covering social, environmental and governance factors – is central to the strategy and operations of businesses of all types and sizes throughout their supply chain as it helps mitigate risks, turn crisis into competitive advantage and create sustainable growth. This is in line with the government’s policy on promoting the development of SMEs, startups as well as their supply chain towards greater adaptability and engagement in sustainable business development. In this regard, the SEC has been continuously promoting the issuance of sustainability-themed bonds namely Green Bond, Social Bond, Sustainability Bond and Sustainability-linked Bond. From 2018 up to 28 February 2023, the fundraising through such bonds has totalled THB 542 billion (USD 16.3 billion). However, despite the ongoing upward trend, the issuances of these bonds were disproportionately small compared to the overall bond market. In addition, most issuers were large-scale companies in specific industries.
The SEC is therefore proposing to amend the regulations on debt securities offering to support the issuance and offering of sustainability-themed bonds through crowdfunding and private placement (PP-10)* channels. Furthermore, the amendments also support the offering of sustainability-themed bonds through convertible debentures by private limited companies (PP-SME)**. This will open up funding opportunities for SMEs, startups and businesses of all sizes, and allow them to participate in sustainable development. The proposed amendments include revisions to the information disclosure rules pertaining to sustainability-themed bonds as well as sustainability issues before and after the offering in line with international standards, for example, the use of the proceeds of the bond for eligible sustainable projects, the process for project evaluation and selection, project progress reporting and the selection of sustainability KPIs. This is also to ensure that investors have accurate and complete information for decision-making, and to increase the credibility of sustainability-themed bonds.
For further details of this public hearing, please visithttps://www.sec.or.th/TH/Pages/PB_Detail.aspx?SECID=888.
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