Asia's oldest bourse, the Bombay Stock Exchange ( BSE), today said it has been granted an 'in-principle' approval by the capital market watchdog Sebi to launch an exchange exclusively for small and medium enterprises (SMEs).
"BSE today received an 'in-principle' approval. The BSE is now gearing-up for its latest venture in an emerging market segment," a release issued here by the BSE said.
A senior Exchange official said the BSE has to now comply with certain conditions like putting in place a trading system, a code for arbitration and sorting out investor grievances, among others, before a final approval is given.
The BSE has been working to put the systems in place for some time now and a dedicated SME exchange will be operational "definitely" in this fiscal itself, he said.
The official declined to give an exact number when asked about the investment BSE is making towards the venture. The new exchange will operate on the BSE platform, he said.
With a view to let smaller firms access equity capital, Sebi had last year come out with guidelines for dedicated exchanges for small and medium enterprises (SMEs).
Considering the lean nature of the companies which will list, Sebi has relaxed rules applicable for listing on such exchanges.
According to the guidelines, a company can do away with the practise of sending full annual reports and reporting quarterly numbers.
Apart from the BSE, its competitor in the equities trading space, National Stock Exchange and the privately promoted MCX-SX, have also shown interest in entering the upcoming segment, according to media reports.