KUALA LUMPUR (May 23): The Securities Commission aims to introduce a trade sale board within the next five years, which would allow the broadcast of intent for trade sales of private companies.

The proposed board will feature listing and search functions where micro, small and medium enterprises (MSMEs) and mid-tier companies (MTC) can provide details of their business for matching, the SC said. That would allow companies and investors looking for exits to connect with other potential investors, it said.

“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,” the SC said.

The initiative is part of SC’s “Catalysing MSME and MTC Access to the Capital Market: Five-Year Roadmap”, launched on Thursday to boost fundraising from greater access to capital market. Under the roadmap, the SC plans to help small- to mid-sized companies raise RM40 billion from capital markets by 2028.

The SC estimates that there are about 15,000 to 28,000 MSMEs and MTCs generating annual sales of under RM500 million, which have the potential to tap the capital market.

“Infrastructure to match demand and supply of capital within the private market is an important factor to facilitate fundraising, and merger and acquisition activities,” said the SC.

The SC also plans to develop a factoring information platform to promote the use of factoring among MSMEs and MTCs. The aim is to aggregate information from the capital market and non-capital market factoring providers on a single platform, the SC noted.

Factoring allows a company to sell its accounts receivables or invoices to a third party at a discount, to meet its short-term liquidity needs. The move mirrors the online factoring platform developed by Mexican development bank Nacional Financiera, which connects large buyers with small suppliers.

“Greater transparency of factoring information will foster greater competition among factoring providers, which may lead to better financing rates,” the SC said. “To accelerate adoption, public agencies can encourage MSMEs and MTCs in supply chains, to make use of factoring via this platform.”