The securities and exchange board (SEBI) has relaxed share listing norms for SMEs.
The securities and exchange board (SEBI) has relaxed share listing norms for SMEs. It has allowed them to disclose their financial results every six months instead of three months as is the norm for the bigger companies.
The companies that are listed in the SME exchange will not be required to send a full annual report to the shareholders or publish their financial results as required in the main stock exchange.
The regulator said in its circular that the companies listed on the SME exchange may send their shareholders a statement containing the salient features of all the documents.
A company that is listed in the SME exchange can migrate to the main exchange provided it meets the listing requirement of the stock exchange. The company must first make a proposal to list the specified securities and obtain the prior approval of the shareholders.
The SEBI circular said that the issue should be handwritten and the bankers shall underwrite 15 per cent in their account. The merchant bankers can enter into an agreement with nominated investors to subscribe to the unsubscribed portion of the issue.
A stock broker of the main exchange need not seek fresh registration for trading on the SME platform and the sub broker need not seek fresh registration, where he/she is affiliated to stock broker who is eligible to trade in the SME platform.
SEBI has decided to grant approvals to only corporatised and demutualised entities for operating as an SME exchange. It had decided earlier to give time to the entities to comply with the regulations.
A balance sheet net worth of 100 crore, a nationwide trading terminals and an online screen based trading system are the things that it should have.
The exchange should have an online surveillance capability that monitors positions, prices and volumes in real time to keep a tab on market manipulation.
The regulator said that it shall adequate arbitration and investor grievances, redressal mechanism operative from the four regions of the country.
The risk management and the surveillance system should be the same as it is for the cash market segment. This was said by the SEBI circular.