The Hindu Business Line : BSE to operationalise trading platform for SME instruments

THE Bombay Stock Exchange (BSE) would be entrusted with the responsibility of providing a nationwide audience for instruments floated by small and medium enterprises (SMEs) by operationalising the new trading platform promised in the Union Budget.

Services under the platform can be availed by companies in the specified category without a formal listing and without the attendant fees charged by the exchange for other companies.

"The BSE would be given the responsibility to operationalise the new trading platform. There would be no listing requirement for companies that would be quoted on the exchange," a senior Finance Ministry official said. The move is expected to provide heightened liquidity of stocks of small and medium-sized companies by attracting investors' interest across the country.

The Finance Minister, Mr P. Chidambaram, had said in his Budget speech that ensuing capital market reforms would include the creation of an "alternative trading platform for small and medium enterprises to raise equity and debt from the capital market."

Companies with investment in plant and machinery of up to Rs 10 crore would be able to avail themselves of the services offered, under the new platform, virtually free of cost.

The Government is in the process of bringing about a new category of companies called the medium sector companies, having plant and machinery investment of above Rs 1 crore and up to Rs 10 crore. The SSI sector is defined as one having such investment of up to Rs 1 crore.

Officials said that the Government felt that there were many good medium- sized companies in which investors might be willing to pump in their money but are precluded from doing so because of the non-availability of the daily quotes of their instruments.

"These companies are listing in the regional stock exchanges and their quotes are not available beyond a limited territory. With this new platform, the price quotations of instruments of the companies would now be available across the country," officials said.