KUALA LUMPUR: The Securities Commission (SC) is considering to introduce a trade sale board to promote private companies to investors.
The regulator said the proposed board will feature a listing and search functionality where micro, small and medium enterprises (MSMEs) and mid-tier companies (MTC) can provide details of the business for trade matching.
The initiative, which was outlined in the "Catalysing MSME and MTC Access to the Capital Market: Five-Year Roadmap report, would enable companies to connect with other potential investors.
"This initiative aims to aggregate information on opportunities for private market investments, as well as potential interest from investors to enable trade sales and diversify exit options," said the SC.
As a part of the roadmap's strategy to facilitate private market deals, the initiative is expected to improve infrastructure and mechanisms for fundraising and trade sales, which can spur greater private market deals and activities.
"Infrastructure to match demand and supply of capital within the private market is an important factor to facilitate fundraising, and merger and acquisition (M&A) activities," it emphasised.
The SC also plans to develop a factoring information platform for MSMEs and MTCs to promote the use of factoring among MSME and MTC, to expand their access to working capital.
Factoring can help companies improve their short-term cash needs by selling their receivables in return for an injection of cash from the factoring company
"Greater transparency of factoring information will foster greater competition among factoring providers, which may lead to better financing rates. "To accelerate adoption, public agencies can encourage MSMEs and MTCs in supply chains, to make use of factoring via this platform," it added.
SC explained that the initiative is part of its learning from a Mexican development bank, Nacional Financiera (NAFIN), which developed an online factoring platform called Cadenas Productivas to connect large buyers with small suppliers, enabling suppliers to access working capital financing through factoring transactions with participating financial institutions.
The programme operates through an online infrastructure, reducing costs and facilitating almost instantaneous operations.