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BSE INDOnext to facilitate trading of illiquid scrips »
Deccan Herald » Business » Full Story

BSE INDOnext to facilitate trading of illiquid scrips

BSE and the participating RSEs will constitute a BSE IndoNext Council to monitor the implementation of the BSE IndoNext.

Union Finance Minister P Chidambaram launched BSE IndoNext on Friday at The BSE Convention Hall to facilitate trading in illiquid scrips listed on regional stock exchanges.

BSE Indonext is a joint project promoted by BSE - The Stock Exchange, Mumbai and The Federation of Indian Stock Exchanges (FISE) representing 18 regional stock exchanges across the country.

Typically, the companies listed on RSEs are small and medium and trading in those scrips has come to a halt as most of the regional exchanges are almost closed. With the launching of Indonext, the SMEs will be able to raise capital and their shares would become more liquid.

According to BSE officials, the scrips that would be trading on the BSE IndoNext platform would need to meet certain quality parameters after due diligence by BSE.
Securities of companies below a certain size now trading on BSE’s B1 and B2 markets of the BSE, will be transferred to IndoNext and these will be traded exclusively on the BSE IndoNext. The participating RSEs would also transfer securities of companies listed on their exchanges to the IndoNext market. About 400 companies are expected to be shifted to IndoNext segment to start with.
BSE IndoNext expects large scale market participation on this single national trading platform. The BSE IndoNext will be activated in a phased manner. The first phase was launched on Friday.

The BSE has set up the BSE IndoNext market as separate trading market on its BOLT system as ‘S’ group. All the eligible securities in the B1 groups of the BSE would be transfer to the ‘S’ group. Eligible scrips from the participating RSEs would also be introduced in the ‘S’ group under the permitted category at BSE. The members of the BSE and the sub brokers of the subsidiaries which are members of the BSE will be allowed to trade in this market. The clearing and settlement as well as the risk management will be the sole responsibility of the BSE at this stage.
Implementation may not require any change in the Bye laws of the BSE. All members of the BSE, including the subsidiaries of the RSEs would thus have an opportunity to trade on this market without any difficulty.

BSE and the participating RSEs will constitute a BSE IndoNext Council to monitor the implementation of the BSE IndoNext.

As per the understanding reached between BSE and regional exchanges, the later would discontinue trading in the shares of those companies which are included in the BSE IndoNext segment. While BSE would also discontinue trading in 'B1' and 'B2' of the shares of those companies which are included in the BSE IndoNext segment.

The companies with paid up capital upto Rs 20 crore listed with RSEs but not with BSE, would be included in the BSE IndoNext Segment.

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