Bahamian small businesses will soon be able to raise up to $5 million through crowd funding, under new rules which will soon be released by the Securities Commission of The Bahamas, Minister of State for Finance Senator Kwasi Thompson said yesterday.
Thompson said the Securities Industry Business Capital Rules, 2021 will modernize the rules for small businesses to raise capital, making the process of crowd funding less costly and less bureaucratic.
“Right now the process is technical, long, cumbersome and really only the bigger businesses tend to do it. But we are now streamlining the process so that small businesses would be able to access crowd funding even easier,” Thompson said while leading debate on the Fiscal Strategy Report in the Senate yesterday.
“Under the terms of these new proposed rules, Bahamians will be able to raise up to $5 million via crowd funding. That is without having to file a prospectus with the commission. The shares created under this framework would be transferable and can be traded on a secondary market such as BISX. Imagine, if you have small businesses now that can sell their shares on BISX and get other Bahamians to invest in their businesses and be able to trade and sell those shares. It is transformative when it comes to small business development.
“For too long, small businesses that wanted to offer shares in their companies to raise capital had their hands tied in bureaucracy. Not anymore. With crowd sourcing provisions and other modifications to the regulatory regime, the ability for small businesses to raise capital and sell shares will no longer be limited to the proverbial big boys in the corporate world. We are bringing the capital markets within reach of Bahamian entrepreneurs and small businesses.”
Thompson said protection for small businesses has also been built into the rules.
“For example, there will be limitations on the number of shares that an individual outside investor may hold, thus protecting the small business owner from hostile takeovers,” he said.
