The securities transaction tax may be waived for transactions on the SME exchange platform, subject to regulatory approvals, said the Bombay Stock Exchange CEO, Mr Madhu Kannan. The request for the same had been made to SEBI and final approval was awaited, said Mr Kannan, speaking at the SME Leadership Summit here.

An attempt at an exchange for SMEs was made in 1990 when the Over the Counter Exchange of India (OTCEI) was incorporated to aid new entrepreneurs to raise capital for their businesses. However, the OTCEI did not succeed.

When asked when BSE's SME platform would be operational, Mr Madhu Kannan said that it would be done soon but did not give any specific time-line.

Mr Lakshman Gugulothu, CEO of the BSE SME exchange, said that the new exchange would be launched within two months, once the regulatory approval has been received. Also, he said that to address the liquidity issues which might arise once the exchange is functional, the merchant bankers to the issue would appoint up to 5 market-makers for the company to be listed. The market-makers responsibility would be to act as a catalyst to ensure that trading happens and create liquidity in the stocks.

BSE officials were supposed to have met with SEBI officials for the final approval for the start of the platform. However, there is still no clarity on when the platforms will be functional. “We had been told by both the BSE and the NSE that the SME exchange platforms will be operational from the first week or the second week of September. So, we do not see why the exchanges are being non-committal on the issue,” said Mr Chandrakant Salunkhe, Founder President, Small & Medium Business Development Chamber of India.

Mr Kannan also suggested a new ticket size for the investors on the SME platform.

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