Under SEC rules, an ATS refers to any organization, association, person or group of persons or system that maintains or provides an electronic market place or facilities for bringing together purchasers and sellers of securities.
Controlled by the Filipino-Singaporean firm Amalgamated Investment Bancorporation, the publicly-listed Cashrounds is an electronic matchmaker for companies looking for private equity investments.
It provides a virtual forum where entrepreneurs can present their business plans on-line and present them to interested investors.
An ATS, according to the SEC, will address the current financing problems of small- and medium-sized companies that cannot meet the listing requirements of the Philippine Stock Exchange.
The SEC said investors could look into these alternative markets for other investment products that are not currently offered by traditional investment outlets.
It added that an ATS has become integral to the modern securities markets, providing investors with enhanced flexibility and reduced trading costs as well as competition to the established securities exchanges.
An ATS would include proprietary trading systems, broker-dealer trading systems or electronic communications networks that are order-matching systems.
The SEC has drafted recently a new set of guidelines that will govern the buying and selling of trade receivables under an ATS.
The state-run Development Bank of the Philippines was the first institution to express interest in giving a boost to the proposed ATS, particularly for small-and-medium enterprises, since its clientele include 200 SMEs which have less than P200 million in total assets.
The DBP’s trading platform will thus allow SMEs to reduce the cost of financing and speed up the delivery of much-needed cash.