look news india
Mumbai: The Securities and Exchange Board of India (SEBI) is considering changes in the guidelines for SME listing as part of curbing misuse of funds raised from small and medium enterprises (SME) platforms.
Sebi has proposed increasing the lot size for SME deposits to Rs 3-5 lakh and insisting on a five-year track record requirement. SEBI officials had recently said that strict proposals would be introduced for SMEs before the end of the current financial year.
SEBI has been seeking recommendations from exchanges and merchant bankers in this regard for some time.
As part of the draft paper, SEBI may bring in eligibility and other common criteria for both the exchanges. Smaller companies are sometimes tempted to take advantage of the regulatory arbitrage opportunity by listing on one exchange and not having the criteria to list on another exchange.
BSE and NSE regulate the SME listing process. Both these exchanges have their own different regulatory standards.
Currently, these exchanges have a uniform standard of paid-up capital of less than Rs 25 crore for SME listing.
Sources also said that SEBI has a proposal to increase the application size for SME listing to Rs 3-5 lakh from the current Rs 1 lakh.
Additionally, underwriting norms, high profitability and net worth requirement, increased promoter lock-in are also being considered.