Conditions of listing for issuers seeking listing on SME Exchange – Model SME Equity Listing Agreement
Circular No. CFD/DIL/6/2010, dated 17-5-2010
In recognition of the need for making finance available to small and medium enterprises, SEBI has decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by Small and Medium Enterprises (“SME”). Consequently, SEBI amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“SEBI (ICDR) Regulations”) by inserting a Chapter XA on “Issue of specified securities by small and medium enterprises”, through notification dated April 13, 2010. In continuation of the same and to facilitate listing of specified securities in the SME exchange, “Model Equity Listing Agreement” to be executed between the issuer and the Stock Exchange, to list/migrate the specified securities on SME Exchange, is specified through this circular.
2. The full text of “Model Equity Listing Agreement – for SME Exchange” is given at Annexure A. This agreement shall be executed for listing of specified securities issued or migrated on SME exchange, in terms of Chapter XA of the SEBI (ICDR) Regulations.
3. Certain relaxations are provided to the issuers whose securities are listed on SME exchange in comparison to the listing requirements in Main Board, which inter-alia include the following:
a. Companies listed on the SME exchange may send to their shareholders, a statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to section 219 of the Companies Act, 1956, instead of sending a full Annual Report;
b. Periodical financial results may be submitted on “half yearly basis”, instead of “quarterly basis” and
c. SMEs need not publish their financial results, as required in the Main Board and can make it available on their website.
4. The above listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992.
5. The Model SME Equity Listing agreement specified in the ‘Annexure A’ shall come into force with immediate effect.
6. All Stock Exchanges are advised to:
(i) execute the Listing Agreement with the issuing companies in line with the Model Listing agreement specified in the Annexure, without limiting or diluting any of the requirements thereof;
(ii) make necessary and consequential amendments, if any , to their bye-laws for the implementation of the above decision;
(iii) disseminate the same on their website for easy access to the Issuers and investors; and
(iv) communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.
7. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.