SEBI likely to announce Guidelines For Smaller Exchanges In December 08


The guidelines and procedures for setting up of smaller exchanges to cater the financial requirement of small and medium enterprises are being given final touches by the SEBI and are likely to be announced towards mid of December 2008 to actively provide alternate finance window.

Addressing the Assocham Conference on 26th November 2008, Dr. T C Nair, Wholetime Member, SEBI said that in the initial phase, 3-4 licences will be provided to the companies who have the net worth income of Rs.100 crore.

He said the BSE and NSE have evinced their desire to set up such exchanges and the objective would be to mobilise resources from the public on the lines of the Alternate Investment Market (AIM) set up in London.

Dr. Nair further said that the proposed stock exchange should be set up as a corporatised entity since inception. It shall convert itself into a demutualised entity and comply with the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in recognised Stock Exchanges) Regulations, 2006 within a specified period (1-2 years) from the date of commencement of exchange.

The exchange for SMEs will be different from existing stock exchanges in terms of companies raising capital and investors investing money in such companies. The SEBI has fixed the minimum trading lot of Rs 1 lakh and trading system may either be order driven or quote driven. The settlement may either be on rolling, trade for trade or call auction basis

The exchange shall have nation wide trading terminals and an online screen-based trading system, which also has a suitable Business Continuity Plan including a disaster recovery sit.



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