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SEBI Norms for Listing

In order to lay down the policy for issue, listing and trading of securities to be issued by SMEs, necessary amendments have been made in the SEBI ICDR Regulations and consequent amendments have been made into various other regulations viz. :

SEBI has, from time to time, issued the circulars and guidelines for setting up of the exchange for SMEs. SEBI vide “ICDR Third Amendment Regulations” 2010 dated 13th April, 2010, inserted a new Chapter XB under the head “Issue of Specified Securities by Small and Medium Enterprises”. A further circular was also issued on 18th May, 2010 after taking into account the suggestions from market participants for the SME platform. The necessary provisions for listing of specified securities under the SME Platform vide the above regulations and circulars are enumerated in brief:

Besides, SEBI has compulsorily mandated market making for all scrips listed and traded on SME Platform. The obligations of market making are as follows:

The application and trading lot size is being kept at INR 1,00,000/- so as to curtail the exposure of retail investors. It has also been stated that the minimum depth shall be of one lakh rupees and at any point of time it cannot go below that amount. The investors holding with value less than INR 1,00,000/- shall be allowed to offer their holding to the market maker in one lot. However, in functionality the market lot will be subject to revival after a stipulated time.

Further, the provisions of SEBI ICDR Regulations apply to SME IPO as well, unless any particular provision is specifically exempted.