14.4         ndian     onom
     Due to absence of trading at the RSEs, the stocks          paid-up capital is likely to go beyond the Rs 25
     of the SME, has become illiquid.                           crore limit.
          The BSE will transfer all its B1 and B2 groups              World over, trading platforms/exchanges for
     to this exchange. The RSEs also transfer their             the shares of SMEs are known by different names
     enlisted companies to the new exchange.                    such as Alternate Investment Markets or Growth
          Now the RSEs will be able to use the BSE              Enterprises Market, SME Board etc. Some of the
     network online—the ‘Webex’.                                known markets for SMEs are AIM (Alternate
                                                                Investment Market) in UK, TSX Ventures in
     sme exchAnges: bsesme AnD emerge 5                         Canada, GEM (Growth Enterprise’s Market) in
                                                                Hong Kong, MOTHERS (Market of the High-
     SME exchange is a stock exchange dedicated for
                                                                Growth and Emerging Stocks) in Japan, Catalist
     trading the shares of small and medium scale
                                                                in Singapore and Chinext, the latest initiative in
     enterprises (SMEs) who, otherwise, find it difficult       China [see ‘World Federation of Exchanges’ for
     to get listed in the main exchanges. The concept           latest comparative idea].
     originated from the difficulties faced by SMEs in
                                                                      Globally, most of these SME exchanges are
     gaining visibility or attracting sufficient trading
                                                                still at an evolving stage considering the many
     volumes when listed along with other stocks in
                                                                hurdles they face —
     the main exchanges.
                                                                      (i) Declining prices of listed stocks and their
          To be listed on the SME exchange, the post-
                                                                          illiquidity,
     issue paid-up capital of the company should
                                                                     (ii) A gradual reduction in new listings and
     not exceed Rs. 25 crores. This means that the
                                                                          decline in profits of the exchanges etc.,
     SME exchange is not limited to the small and
                                                                          (for instance, AIM had three predecessors;
     medium scale enterprises (which are defined
                                                                          CATALIST succeeded SESDAQ with new
     under the ‘Micro, Small And Medium Enterprises
                                                                          regulations and listing requirements).
     Development Act, 2006’ as enterprises where
                                                                    (iii) In most jurisdictions, idea of a separate
     the investment in plant and machinery does not
                                                                          exchange for SMEs have become unviable
     exceed Rs. 10 crores). As of now, to get listed in
                                                                          and hence tend to be platforms of existing
     the main boards like, National Stock Exchange,
                                                                          exchanges, perhaps cross-subsidised by
     the minimum paid-up capital required is Rs. 10
                                                                          the main board/exchange.
     cr and that of the BSE is Rs. 3 cr. Hence, those
     companies with paid-up capital between Rs. 10                    In India, similarly, after the two previous
     cr to Rs. 25 cr have the option of migrating to            attempts—OTCEI (Over the Counter Exchange of
                                                                India, 1989) and Indonext—the market regulator,
     the Main Board/or to the SME exchange. The
                                                                SEBI, on May 18, 2010 permitted setting up of
     companies listed on the SME exchange are allowed
                                                                a dedicated stock exchange or a trading platform
     to migrate to the Main Board as and when they
                                                                for SMEs. The existing bourses/stock exchanges
     meet the listing requirements of the Main Board.
                                                                in India, BSE and NSE went live on March 13,
     There shall be compulsory migration of the SMEs
                                                                2012 with a separate trading platform for small
     from the SME exchange, in case the post-issue
                                                                and medium enterprises (SMEs). BSE has named
        5.  This section is based on various sources—the, SEBI, its SME platform as BSESME, while NSE has
            NSE, BSE, ‘World Federation of Exchanges’, select   named it as Emerge.
            issues of The Economist and news reportings of The
            HT Live Mint, The Business Line and The Economic          Unlike in India, many of these SME exchanges
            Times.                                              in various countries operate at a global level, due to