SEC raises crowdfunding cap for retail investors to 50 million baht

In an effort to foster growth among startups and small to medium-sized enterprises (SMEs), the Securities and Exchange Commission (SEC) is extending the ceiling on security-based crowdfunding offers to 50 million baht for retail investors. Previously, the limit was 40 million baht. However, institutional, high-net-worth, and ultra-high-net-worth investors are not subjected to any caps.

The financial regulator put forth in a statement yesterday that the newly revised rules about the engagement of securities through the crowdfunding system were crafted to consistently encourage the financing of early-stage businesses and SMEs.

The regulations, implemented on July 16, also serve to enhance the monitoring of securities offerings channelled through the crowdfunding systems and related funding portals. This path is projected to simplify, optimise and escalate the process, according to the SEC.

Retail investors now have the opportunity to partake in crowdfunding offers amounting to 50 million baht, a significant increase from the prior limit of 40 million baht, for all securities.

In contrast, the plethora of securities companies can offer to institutional, high-net-worth and ultra-high-net-worth investors is limitless. Furthermore, these investors are exempted from taking a knowledge test before engaging in crowdfunding securities, per the directives of the SEC.

With the updated rules now in place, the designation of institutional investors linked to crowdfunding has been broadened to incorporate private equity, venture capitalists, angel fund investors, and a wide array of other investment experts.

Simultaneously, individuals or entities running funding portals with the desire to renew their official approval can apply 60 days prior to the expiry of their existing licensing.

Lastly, the regulator mandates that funding portals must notify the SEC should there be any alterations in qualifications or the dispensation of responsibilities within an articulated timeframe.

This covers a range of scenarios such as the suspension of its required duties by a funding portal, the inability to maintain the stipulated qualifications, or any alterations within its organisational structure involving individuals holding key roles such as directors or managers, reported Bangkok Post.