e   rit    ar et in ndia       14.5
     smallness of the market, allowing for listing by both        Before the arrival of national level stock
     domestic as well as foreign companies. Though the      exchanges, India was not having any exchange of
     names suggest that they are set up for SMEs, these     national status—better say there was no Indian
     exchanges hardly follow the definition of SMEs         stock market, but stock markets showing only
     in their respective jurisdictions. Also, many of       regional pictures. Besides, the national stock
     them follow a ‘Sponsor-supervised’ market model,       exchanges did solve some major problems of stock
     where sponsors or nominated advisors decide if         market, we may also call their arrivals as part of
     the listing applicant is suitable to be listed or not, the stock market reforms in India. The common
     i.e., generally no quantitative entry criteria like    features of these exchanges are:
     track record on profitability or minimum paid-up             (i) all are situated in Mumbai;
     capital or net worth, etc., are specified to be listed
                                                                 (ii) all do screen-based trading (SBT);
     in these exchanges. Instead, they are designed as
     ‘buyers beware’ markets for informed investors.            (iii) all have their trading terminals in the
     SEBI has also designed the SME exchanges in                        major cities of the country;
     a similar format with provisions for ‘market               (iv) all are web-enabled;
     making’ for the specified securities listed on the          (v) all are limited liability companies;
     SME exchange.                                              (vi) the brokers registered here have no say in
           As is the case globally, certain relaxations are             either the ownership or the management
     also provided to the issuers whose securities are                  of the exchanges;
     listed on the SME exchange in comparison to               (vii) all are counted among the best and
     the listing requirements in the Main Board (such                   the most technology-equipped stock
     as in BSE and NSE, in the case of India), which                    exchanges in the world.6
           (i) Publication of financial results on ‘half    PlAyers in the stock exchAnges
               yearly basis’, instead of ‘quarterly basis’,
               making it available on their websites        Broker
               rather than publishing it.                   Broker is a registered member of a stock exchange
          (ii) Option of sending a statement containing     who buys or sells shares/securities on his client’s
               the salient features of all the documents    behalf and charges a commission on the gross
               instead of sending a full Annual Report.     value of the deal—such brokers are also known as
         (iii) No continuous requirement of minimum         commission brokers.
               number of shareholders, though at the              Brokers who offer services such as investment
               time of IPO there needs to be a minimum      advice, clients’ portfolio planning, credit when
               of 50 investors, etc.                        a client is buying on margin other than their
         (iv) The existing eligibility norms like track     traditional commission job are known as full service
               record on profits, net worth/net tangible    brokers. In India such brokers are just coming up.
               assets conditions, etc., have been fully
               relaxed for SMEs as is the case globally.
          (v) However, no compromise has been made          A jobber is a broker’s broker or one who specialises
               to corporate governance norms.               in specific securities catering to the need of other
           Common Facts about the National Stock               6.    P. Chidambaram while presenting the Union Budget
     Exchanges                                                       2006–07, (New DelhI; Government of India, 2006).