People power at Singapore Exchange! Crowdfunding on the horizon

Staid and somber Singapore has a reputation for traditional and rigid procedure, a solid and reliable region in which to invest, which does not embark on new, risk averse ideologies.

In a break from this tradition, Singapore Exchange (SGX), one of Asia’s emerging electronic trading venues, has begun considering the feasibility of an equity crowdfunding platform for early-stage companies, and has formed a team focused on small and medium-sized enterprises (SMEs).

SGX rose to prominence just a few years ago, along with other emerging exchanges including the Dubai Gold and Commodities Exchange (DGCX), and other venues in the Far East and the Indian subcontinent, with a great degree of success.

Among its peers in South East Asia, SGX’s move toward attracting innovative start ups to its fold would stand it out from Tokyo’s long-standing Tokyo Financial Exchange, home to many large, multinationals and vast Japanese enterprises.

The new initiative, led by former SGX head of issuer regulation Mohamed Nasser Ismail, would signal a less bureaucratic and grey-suited approach toward companies wishing to list as public entities, as well as provide an opportunity for investors to gain tremendously from the rapidly rising share prices of promising new companies which go public shortly after establishment.

This ideology is not often demonstrated by the vast and established markets in South East Asia, whose robust status exists due to giant corporate conservatism, and is not aligned with the business methods often displayed in go-getting Western nations such as the United States (mainly centered around Silicon Valley, California) and Israel.

Tel Aviv Stock Exchange in Israel was one of the very first executing venues to adopt a proactive approach toward crowdfunding.

In June 2013, Professor Shmuel Hauser, Chairman of the Israel Securities Authority (ISA) stated that “It is of paramount importance to keep the center of activity for Israeli technology companies in Israel, given their substantial contribution to economic growth and job creation.”

“Implementation of these recommendations constitutes an important facet of the ISA roadmap for developing the capital market and the Tel Aviv Stock Exchange. They recommended measures are designed to tear down barriers and create incentives towards turning TASE into a financial hub that attracts R&D companies” concluded Professor Hauser.

Esther Levanon, the former CEO of the Tel Aviv Stock Exchange explained that The Committee marks a further step in the realization of our vision to turn the Tel Aviv Stock Exchange into a global hub for high tech companies”, with the committee making a definite point that the venue recommended adopting off-exchange solutions for startups seeking to raise capital, such as crowd funding.

Shortly after this decision was made, IG Group subsidiary NADEX, one of two US binary options exchanges, saw its Chairman Yossi Beinart elected as CEO of the Tel Aviv Stock Exchange, alluding further toward the innovative trading venue’s drive toward attracting leadership talent with great experience of innovative and modern trading environments.

Should SGX elect to go down this route, it could spearhead Singapore’s emulation of Israel and become the start up nation of the East.

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