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BSE SME Exchange - Business
BSE SME Exchange - Business
Introduction
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Key Players
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Beneficial Aspects
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A.
Introduction
Mission
Provide the world class platform for the SMEs and Investors to come together and raise the equity capital.
the equity capital for the growth and expansion of SMEs. It also provides the
immense opportunity to the investors to identify and invest in the good companies at early stage. It will help unleash the valuation of the company and
in the process create wealth for all the stakeholders including investors, besides
considerable long term capital gains tax benefits and facility to exit at any point of time
Introduction
Capital Market Regulator SEBI has given In Principle Approval to Bombay Stock Exchange (BSE) Ltd. to launch the BSE SME Exchange/Platform . BSE is leveraging the existing Equity platform i.e. BOLT System for launching the BSE SME Exchange. Negligible cost in launching the platform. All Merchant Bankers empanelled with SEBI are by default MBs for this segment. Additional responsibility of secondary market for market making. All Members registered with BSE are by default Members for this segment. No additional infrastructure required by Members for secondary market trading.
Introduction
SME companies with post issue paid up capital up to 25 crore can list on the BSE SME Exchange. 100% under writing by the Merchant bankers mean that the SME listing-cum-IPO issue will be 100% success. Larger participation of investors exit option Liquidity in the secondary market Market Making
The abridged version of the annual reports need to be sent to the investors instead of the entire annual report and posting the soft copy of the report on the website is sufficient.
The issue expenses will be minimal on the marketing and stationery. However, the issue will be charged for underwriting, sub-underwriting and responsibility of three years market making. Market Making is compulsory for 3 years, unlike on main platform.
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B.
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C.
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Nascent Stage
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All existing Trading Members would be eligible to participate in SME exchange without any further registration
100% underwritten issues and Merchant Banker/s shall underwrite 15% in their own account The Merchant Banker to the issue will undertake market making through a stock broker who is registered as market maker with SME Exchange. The Merchant Banker shall be responsible for market making for a minimum period of 3 years
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Market Maker allowed to deregister by giving one month notice to the exchange
The exchange shall prescribe the minimum spread between Bid and Ask price During the compulsory market making period, the promoter holding shall not be eligible for the offering to market makers
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Corporate Governance
Clause 49 of the listing agreement and corporate governance will be applicable for the SME Exchanges also. There has to be 50% independent Directors and the remaining 50% will be promoter Directors.
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E.
The systems necessary for monitoring the market making activity and providing the quotes are made ready to comply with SEBI Regulations.
The trading time of this platform is from 09:00 am to 03:30 pm BSE is fully equipped to launch the BSE SME Platform.
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Market Makers
Only the Members of the stock exchanges recognized by the SEBI can act as Market Makers. The members desirous of becoming market maker have to get themselves registered as market maker with the BSE SME Exchange by filing the registration form. These members should have a minimum experience of 3 years, minimum net worth of Rs. 5 crore and a daily turn over of Rs. 10 crore. The market maker shall have additional net worth of Rs. 2 crore for additional scrip.
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The market makers can also buy from or sell to the nominated investors the required shares for market making. The merchant banker and nominated investor need to enter into an agreement in this regard.
The nominated investors can be QIBs and PE Firms who are registered with the respective Regulator.
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A minimum spread of 5% is prescribed, which shall facilitate the market making and make it easier for the members empanelled.
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The SME migrating to the main board has to comply with all the main board norms like minimum 1000 investors, pay main board listing fees and do the quarterly compliance etc.
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F.
Key Players
Key Players
Venture Capital Funds P/E funds Angel Investors HNIs Financial Institutions NBFCs QIBs Registrars Merchant Bankers Members and Market Makers Financial Advisors CSs, CAs, CFOs etc SME Companies
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G.
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H.
Beneficial Aspects
The listed SMEs will unlock their wealth in the medium to long term and will do the wealth creation for the promoters and the investors.
The listed SMEs will get better visibility among the investors. The investor base of the company improves for the listed companies in medium term.
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We have interacted with the market intermediaries over the last six months. There were apprehensions about the SME model in the beginning. After few rounds of discussions, we see the substantial change in the perception of the SME platform. Many merchant bankers are optimistic and the members with market making experience are positive about the SME Platform. We are hopeful that these challenges will not be a roadblock for the successful take off of the BSE SME Platform.
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I.
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Marketing Activities
Road Shows Jointly organizing seminars with the Chamber of Commerce' of different states for illustrating advantages of listing Training Programs Advisory Committee Segment Awareness Programs Reaching the potential SME companies through web portals and mails
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We have already conducted the Seminars in Maharashtra, Gujarat, Andhra Pradesh, New Delhi, Kolkata etc and lined up large number of Seminars to cover other parts of the country. We have detailed Marketing plan to reach out to the SMEs spread across the country.
We are tying up with channel partners which include various institutes and associations engaged in the development of SMEs so as to create awareness among the SME companies about the benefits of listing at this platform.
We are also educating the professionals through the platform of ICSI and ICAI , as the professionals can play important role in educating the promoters and management of SMEs.
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