The Securities and Exchange Commission is planning to establish the Office for the Advancement of Strategic Investments in SMEs (OASIS) as it fully supports the more IPO listings from the SME sector.
“We would be more than happy to see more SMEs undertaking IPOs (initial public offerings). It is part of our mission to provide the necessary assistance to achieve this commitment,” said SEC Chairperson Emilio B. Aquino.
He noted that, this will be “an OASIS not to draw water but capital. And certainly not watered stocks. The formation of OASIS is dedicated to promoting the interests of SMEs.”
Aquino said the SEC aims to set up the capital market as a viable alternative to raising capital for SMEs and simplify the capital-raising products and streamline the registration processes for SMEs.
The SEC will also encourage the Investment Houses and other Financial Institutions to conceive and implement a SME-friendly underwriting or advisory program.
Aquino said “During this health menace, the country was subjected to restricted movements and hard lockdowns as part of the health protocols to combat the spread of the virus. This heavily impacted our MSMEs.”
He added that, “Most of them lacked the funds necessary to bounce back, with the magnitude of the working capital shortage more serious in smaller firms. Further, this prolonged pandemic made it more difficult for MSMEs to raise funds from formal financial institutions and to survive the crisis.”
But, Aquino pointed out that, “As some areas are moving to the recovery stage, MSMEs continue to confront a sharp drop in demand and revenue specially as we deal with the continuing threats of Covid-19.”
“With this landscape, it is the government’s thrust including the Commission to support the sector’s journey towards recovery,” he said.
Aquino noted that, “an IPO can benefit a growing company in countless ways. It allows a company to raise money to fund operations, expansion, fuel growth, fund recovery and pay down debt. IPO propels progress, opportunities, recovery, employment, livelihood and all things related to building up.”
Aside from helping SMEs go public, Aquino said the SEC will also engage multilateral agencies such as the Asian Development Bank and International Finance Corporation in launching SME-focused investment funds.
Also part of the SEC’s agenda is to challenge the existing markets and intermediaries to update and upgrade their systems through the use of SME-responsive Fintech.
The Commission also plans to collaborate with other government offices and the private sector in developing the appropriate ecosystem for SMEs, both developmental and regulatory.
“All of the above strategic undertakings are meant to contribute to the realization of the Commission’s ambitious [email protected] goal. We challenge ourselves that by the time we celebrate our 88th year anniversary on November 11, 2024, there are at least 888 companies that would have tapped the capital market for their capital raising activities,” Aquino said.