September 07, 2008

SEBI approves setting up of a SME exchange

It is reported that Securities and Exchange Board of India has given its approval for setting up an exchange dedicated to small and medium enterprises to allow them better access to risk capital.

Mr M Damodaran chairman of SEBI said that "The Board has cleared the proposal to have a separate exchange. Consequent to the Board’s decision, a policy framework will soon be announced and persons interested in setting up a small and medium enterprise exchange would be invited to come forward with their proposals." He added that after studying the proposals and eligibility criteria, SEBI would approve one of the proposals for setting up the exchange.

The SEBI move is aimed at promoting the small and medium enterprise sector comprising several unlisted companies belonging to different sectors. Worldwide, the concept of small and medium enterprise exchange is already being implemented successfully. London Stock Exchange’s Alternative Investment Market has succeeded in attracting a large number of small sized firms globally, including a few Indian companies.