Bombay Stock Exchange (BSE) received SEBI’s Approval to set up SME Exchange

Asia’s oldest bourse Bombay Stock Exchange (BSE) on 28 September 2011 got an approval to set up an exchange for small and medium enterprises (SMEs) from the capital markets regulator Securities and Exchange Board of India (SEBI).

The permission from SEBI is likely to boost  BSE's efforts in offering multiple asset classes to Indian investors. The permission to set up SME will enable BSE to contribute towards the governmental agenda of greater financial inclusion and allowing promising enterprises of the future to access retail capital.

The new exchange set up by BSE will allow small unlisted domestic companies, with less than Rs 10 crore capital base, to raise money from the primary market.

BSE was committed to deliver the best products, services, and asset classes to all our stakeholders and look forward to the success of the SME segment. While the government has taken several measures to ease access to credit, giving them easier access to equity is the next step in that process. The new exchange will be a facilitator in raising funds for SMEs.

BSE SME Exchange conducted several seminars for educating the SMEs on the benefits of listing and the preparations required for listing on the BSE SME Platform across the country. BSE SME tied up with channel partners, who include various institutions and associations engaged in the development of SMEs. More seminars are lined up in this year.

BSE SME planned for sectoral seminars for auto ancillaries, infrastructure, pharmaceuticals, manufacturing, agro-based industries, suppliers to OEMS and the like.

National Stock Exchange (NSE), India’s largest exchange, is currently awaiting a formal Sebi approval to start a similar SME exchange. In May 2011 Sebi had given an in-principle approval to both BSE and NSE to set up SME exchanges.

Sebi had on 2 June 2011 allowed exchanges to introduce programmes to enhance liquidity of thinly-traded securities in their equity derivatives segments. NSE currently controls almost the entire equity derivatives market, with a turnover of about Rs 29.63 trillion in August. BSE’s comparable turnover was Rs 34.09 crore.