The Hindu Business Line : SEBI hopeful of setting up an exchange for SMEs this year

Mr M. Damodaran, Chairman, SEBI, with Dr Vijay L. Kelkar, Chairman, 13th Finance Commission of India, at the 5th Annual Conference on Capital Markets held in Mumbai on Thursday. —

Our Bureau

Mumbai, Jan. 31 The Securities and Exchange Board of India is looking forward to put in place enabling provisions that would facilitate an exchange for the small and medium enterprises (SMEs) in the calendar year 2008, but the chances of aspiring regional exchanges being entrusted the responsibility are little.

The SEBI Board has already approved an exchange for the SMEs to raise capital from the equity market.

Speaking at FICCI’s Annual Capital Market Conference, the SEBI Chairman, Mr M. Damodaran, said, “We will enable putting in place an exchange which will cater to the needs of the SMEs. This should hopefully happen in calendar year 2008.” “A large number of regional stock exchanges have come to us … we are not too sure, given their track record, whether they are the right candidate to enable the SME sector to access equity capital having known that OTCEI (Over the counter exchange of India) is a failed exercise,” Mr Damodaran said.

Not more than one

The market regulator will initially allow one SME exchange to operate as globally the trend is in favour of having smaller number of exchanges. “We would start afresh, look at those that have the capability to set up this exchange, and in order to see that there is no fragmentation … we will not have more than one exchange to begin with and then, if the market grows to size, we may look at setting another exchange,” he said.

Mr Damodaran also said that National Institute of Securities Market (NISM), which has been set up by SEBI for providing education and research in the securities market and for training market participants, had made significant progress as the institutional framework was quickly falling in place. NISM would sign an MoU with US-based Stern School of Business, New York University, on February 11, Mr Damodaran said, adding that the move would enable our practitioners access requisite courses available in India and don’t have to go to the US to pursue that.

NISM would have experts from overseas as Chair Professors; two have already accepted to come as Chair Professors for a part of the year, he said.

The six schools that have been already made operational at NISM would also provide formal capital market education leading to a PhD, besides investor training and investor adviser training.

SEBI has also recruited 37 professionals this year so far from various business and law schools as compared to 65 professionals last year, Mr Damodaran said. SEBI has been under pressure in terms of its work force given the high growth witnessed in the capital market.

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