SEBI to relax start-up listing norms by next month

Mumbai: Stock exchange board of India (SEBI) has decided to relax the start-up listing norms, by next month, to give an easier exit opportunity to their existing investors.

The new norms are being prepared to help these enterprises for raising funds. These norms will also apply to enterprises from abroad.

U K Sinha, Chairman, SEBI, said that the regulator has decided to tweak the regulations to make them more attractive after incorporating some fresh suggestions from the industry and market players.

What Chairman Sinha said:

• "Not single company has got listed on this so far, although we formulated the rules after very very detailed consultation with the industry and market players. We are again looking at revising the norms as there have been some fresh suggestions from the industry," said the SEBI chairman.
• Sinha also stated that the Institutional Trading Platform (ITP) is yet to see any start-up listing ever since an easier set of compliance and disclosure requirements was notified in August 2015.
• Sinha told media, under the rules, start-ups can list on the separate ITP of stock exchanges such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
• Asked about the time-frame, he said, SEBI may take up the matter in its next board meeting in July.

The new rule:

• Under the notified rule, minimum trading lot and the minimum application size have been kept at Rs 10 lakh so that only highly technical and large investors come in.
• For their listing, SEBI had also relaxed the mandatory lock-in period for promoters and other pre-listing investors to six months, as against three years for other companies.
• Besides, the disclosure requirements for these companies have been relaxed. The companies can, however, graduate to the main platform later and the small investors can also invest at that time.