and Industry, Coimbatore
Circular
June 16, 2010
SEBI Circular on SME Exchange
We wish to inform our Members that Securities Exchange Board of India (SEBI) in its Board meeting held on 9th November 2009 has taken certain decisions with respect to setting up of an SME Exchange / Platform. These include relaxations of entry norms, measures for risk management, enhancement of role of a merchant banker, measures for promoting liquidity, simplification of disclosure norms for the SMEs and relaxation of specific provisions of the listing agreement (Annexure-I).
There are certain relaxations / exemptions that are granted to Small and Medium Companies (SMCs) under Section 2 (f) of the Companies Accounting Rules 2006 (Annexure-II). However, once an SMC comes out with a public issue and gets listed, these relaxations / exemptions will not be applicable to the SMCs. It is for consideration whether these rules should exclude the SMCs once they are listed or a separate set of accounting standards for SMEs being listed on the proposed exchange may be evolved.
Also, once an SME proposes to come out with a public issue, it shall have to conform with the conditions with respect to public issue as given in Sections 55-81 of the Companies Act 1956 (Annexure-III). These sections deal with the prospectus and allotment, and other matters relating to issue of shares or debentures prospectus and a listed SME shall not have any relaxation with respect to these provisions.
The circular issued by SEBI along with enclosures are available at the Chamber office for reference by Members. Members may avail them and send their feed back / views / suggestions on the above to enable us to submit the same to the Government.
D Nandakumar
Hon. Secretary