India Tightens Eligibility Norms for Listing on the Bombay Stock Exchange’s SME Platform

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Nov. 29 – India’s Bombay Stock Exchange (BSE) has issued new conditions for companies seeking to list on the BSE’s small to medium-sized enterprise (SME) platform. Companies seeking to be listed on this platform through initial public offerings (IPOs) are already required to comply with the quantitative eligibility norms prescribed by the BSE. Now, however, a company’s site will also have to be visited by the exchange before being granted permission to use the name of the exchange in the offer document.

Furthermore, it is now desirable that a company files a compliance certificate by a Practicing Company Secretary. This is stipulated by the guidance note issued by the Institute of Company Secretaries of India as and when such a certificate is made applicable by the SME platform of the BSE.

The exchange has also introduced a new eligibility criterion for companies who wish to transfer from the SME platform to the main exchange.

“Companies have to be mandatorily listed and traded on the SME Platform for a minimum period of two years and only after that they can migrate on to the Main Board as per the guidelines specified by SEBI vide their circular dated May 18, 2010 and as per the procedures laid down under ICDR guidelines Chapter XB,” according to the exchange.

Since the BSE launched the SME platform in March of this year, it has received a very positive response, with 11 companies already registering on the platform. It has now been reported that the BSE is preparing to launch an SME index for the first time in India. Venture capitalists and foreign funds have increasingly shown interest in Indian SMEs, and it is expected that an SME index will attract investors to finance SMEs through the exchange.

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