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Thai Stock Exchange Launches Blockchain-Based Startup Marketplace

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The Stock Exchange of Thailand (SET) is set to launch a new blockchain-based marketplace for startups in the third quarter of 2017. This move comes as a response to Deputy Prime Minister Somkid Jatusripitak who in September 2016 strongly suggested that the SET should create ways to help startups mobilize funds.

“This issue is important, and the SET should have a plan to help startups. They might create a new sector or bourse to serve these startups,” said Jatusripitak. Startups are currently not allowed to trade on the SET because as new businesses they do not meet the exchange’s listing requirements.

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The blockchain-based marketplace though operated by the SET will be different from both the SET and Market for Alternative Investment (MAI) as it will have no restrictions on trading regarding units or amounts as the blockchain removes these limitations. Both the SET and MAI allow for trading in board lots or units of 100 only. SET president Kesara Manchusree, however, added that trading in the blockchain marketplace would only be open to institutional or high-net-worth investors with experience in investing such as venture capital funds or angel investors since this type of trading carries greater risk.

The senior executive vice-president and chief marketing officer of the SET, Santi Kiranand further explained the restrictions imposed. “It will be a 'marketplace,' not a miniature of the SET and the MAI, where investors generally believe that securities traded are well-selected and regulated. As it is not a trading board, there is no regulator to verify their quality and investors must make investments by themselves.”

In addition to the regulations imposed on investors trying to participate in the marketplace, startups seeking to raise funds through the platform must also adhere to certain qualifications. "The startups that want to mobilize funds from this marketplace must register with the authorities, conduct business with transparency and have a single financial account," said Mr. Kiranand. The SET is laying the groundwork for the marketplace and is expecting all plans to be ready by the end of March 2017.

At present 607 companies have already registered with the SET for trading in the blockchain market, and although it is only open to startups, there are plans to expand it to small and medium-sized enterprises in the future.

The use of blockchain technology in trading for startups meets a need that has been an impediment to the growth of the business landscape in Thailand and is being met with anticipation as is evidenced by the large number of firms that have already expressed interest in participating.