New trading platform, relaxed norms for SMEs

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 listings.

"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," Sebi Chairman C B Bhave told reporters.

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.