Market regulator SEBI today said separate bourses can be set up for trading in shares of small and medium enterprises, while existing exchanges can also have a separate platform for SMEs.

With a view to encourage small and medium firms to come out with public issues, market regulator SEBI on Monday, allowed existing stock exchanges to set up a separate trading platform and relaxed the criteria for their listing.

However, these SME exchanges can also be opened separately by eligible parties, not as a part of the existing exchanges, SEBI Whole Time Member, Prashant Saran told reporters here on Tuesday.

SEBI Chairman, C.B. Bhave said on Monday that existing exchanges can open the SME trading platform, as this will help cost effectiveness. But the statement was interpreted as a strict ‘no’ for setting up of separate SME bourses.

“There was nothing in yesterday’s announcement that prevents (eligible parties) from opening separate exchanges for SMEs... it can be separate also,” Saran said on the sidelines of an IBA-seminar here.

“It makes sense to allow the present exchanges to do it (set up the SME trading platform). This will help the process cost effective to set up the new trading platform for SMEs. It need not have to be separate exchange,” Bhave had said.

Sebi also said that these companies will be exempted from the eligibility norms like track record on profitability as is applicable to other issuers, Bhave said.

Bhave said, for firms coming out with issues to be traded on these platforms, they have to have at the most Rs 25 crore of paid-up capital. It means if the paid-up capital of a firm rises above Rs. 25 crore after the issue, they will not be eligible for using the platform reserved for SMEs.

To be listed on the main boards of the NSE and BSE, these exchanges will have to have Rs. 10 crore of minimum paid up capital. The firms also have to come out with issues with a minimum size of Rs. one lakh, Bhave said.


SEBI wants listing within 7 days of IPO November 18, 2009

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