BSE and FISE jointly submit a proposal to SEBI for formation of
BSE IndoNext for shares of small and medium cap companies

Shares of small and medium cap companies, which are at present listed only on various Regional Stock Exchanges (RSEs), do not have liquidity as many RSEs have either nil or negligible turnover. Due to this, the investors in these companies are unable to find an exit route and realise a fair value for their investments. Also, these companies are not able to raise fresh capital from the capital markets for their expansion plans, working capital requirements, etc.

In an attempt to alleviate these problems, the Stock Exchange, Mumbai (BSE) and Federation of Indian Stock Exchanges (FISE), which represents 20 RSEs in the country, have jointly proposed to form a national market termed BSE-IndoNext for providing a facility for trading and settlement of shares of small and medium cap companies listed both at BSE and various participating RSEs.

The BSE IndoNext platform would enable shares of companies with paid up capital upto Rs. 20 crores listed and traded on BSE and various participating RSEs to be traded in a national market through a single order book on the BOLT system of BSE.

The members of BSE and participating RSEs would be able to participate in trading in the scrips included in the BSE IndoNext. The operations of this segment would be managed by BSE.

The BSE IndoNext council comprising of representatives of BSE and Participating RSEs would oversee the affairs of the BSE IndoNext subject to overall supervision and control of BSE Governing Board.

BSE and FISE have jointly worked out modalities for operation of BSE IndoNext and have submitted a proposal today to SEBI for its approval.

BSE and FISE consider this as a major capital market initiative, as formation of BSE- IndoNext would help investors throughout the country through enhanced liquidity in their shares of small and medium cap companies. This would also rejuvenate the vast network of about 7000 members of RSEs, who cater to the investors in the far-flung areas of the country.

Formation of BSE IndoNext is in the overall interest of our economy, as Small and Medium Enterprises, which are engines of economic growth and employment would also be able to raise resources through the capital market.