Bill seeks local bourse for SMEs | Inquirer Business

Bill seeks local bourse for SMEs

/ 07:00 PM October 01, 2014

MANILA, Philippines—A congressman from a real estate family wants to set up a stock exchange market exclusively for small and medium enterprises (SMEs).

Las Piñas Representative Mark Villar filed House Bill 4942 titled “Small and Medium Enterprises Stock Exchange Act of 2014” to improve the SMEs’ capitalization to further the growth of these businesses.

The bill seeks to create a SME Exchange (SMEX) that will allow SMEs, which cannot meet the capitalization requirements for public listing by the Philippine Stock Exchange.

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Under the bill, SMEX will give SMEs a steady and cheap pool of funds to meet the business requirements.

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Representative Villar, the son of real estate magnate and defeated presidential candidate Manny Villar, said SMEX seeks to make these businesses “investment ready.”

The solon added that in the long run, the local bourse for SMEs would broaden the capital market.

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In the bill’s explanatory note, Villar said SMEs comprise 90 percent of the total number of business establishments and 97 percent of exporters.

“Unlike large companies, SMEs experience more difficulties in obtaining finance to fund their capitalization or expansion requirements,” he said.

The bill defines the SMEX as a stock market catering to SMEs that will be self-regulatory and under the supervision of the Office of the President.

The bill will also create a Board of Governors that will manage and control the SMEX and will be composed of the Governor of the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission (SEC) representative, the Philippine Stock Exchange representative, and five members from the SMEX.

According to the bill, only registered members may deal or transact businesses with registered brokers or securities dealers.

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