BSE, NSE get in-principle Sebi approval for SME platform

The Securities and Exchange Board of India (Sebi) on Wednesday permitted the Bombay Stock Exchange (BSE) and the National Stock Exchange to launch a separate trading platform for small and medium enterprises (SMEs) segment. Sources say, both the exchanges were in a race to launch the platform before the end of 2011.

MCX-SX, aspiring to launch the segment, has been left out due to its ongoing tussle with the markets regulator.

Ravi Narain, MD & CEO, NSE said, “NSE recognises that SME’s play a very critical role in the Indian economy. We are committed to providing a world class platform to deserving SME’s to give them an opportunity to list. This will give them access to the capital markets in an efficient manner and help raise capital to meet their growth opportunities.”

Narain said they were engaging with market participants on the proposed SME platform and we are making good progress to operationalise it.

“The BSE is now gearing-up for its latest venture in an emerging market segment,” a BSE release said.

A senior exchange official said the exchange has to now comply with certain conditions like putting in place a trading system, a code for arbitration and sorting out investor grievances, among others, before a final approval is given. The BSE has been working to put the systems in place for some time now and a dedicated SME exchange will be operational “definitely” in this financial year itself, he said.

With a view to let smaller firms access equity capital, Sebi had last year come out with guidelines for dedicated exchanges for SMEs. Considering the lean nature of the companies which will list, Sebi has relaxed rules applicable for listing on such exchanges. According to the guidelines, a company can do away with the practise of sending full annual reports and reporting quarterly numbers.