BSE to launch SME exchange by year-end

The Bombay Stock Exchange will start a separate platform for the small and medium-size (SME) enterprises by the year-end, a top bourse official said today.

"We are awaiting Sebi approval. I am hopeful that in 3-6 months we will start the SME exchange," BSE Deputy CEO Ashish Chauhan told PTI.

The exchange submitted the preliminary application to capital market regulator Sebi earlier this month seeking permission to launch the SME exchange.

With the exchange going live, the SMEs will be able to raise money from the market.

The Asia's oldest bourse is in discussion with various merchant bankers and brokers to get their feedbacks on the endeavour. Currently, there are almost 3,000 SMEs trading through the BSE platform.

Besides BSE, National Stock Exchange and MCX Stock Exchange (MCX-SX) have also shown interest in setting up such platforms for the SMEs.

Sebi laid the groundwork to allow the SMEs to get enlisted on such exchanges recently. The regulator has already notified the guidelines for the exchanges and now it is up to them to set up the platform.

In November last year, Sebi had issued guidelines for setting up SME exchanges in India and for the SMEs wanting to get enlisted in such exchanges.

The guidelines released by Sebi last year relaxed the listing and disclosure requirements for the SMEs.

It removed the need to comply with the eligibility norms for initial public offerings and follow-on public offerings as prescribed by Sebi's (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Further, it also removed the requirement of an SME to have a track record to be listed on the bourse, thereby making it even possible for start-ups to approach the equity market.

The submission of their financial results will also be done on a half-yearly basis instead of quarterly.

Experts say these measures would considerably reduce the expenses associated with public issues and the subsequent listing on exchanges.