Sebi flags misuse of SME platform, plans simpler rules for mkt access

Dedicated SME portal in the works to ease compliance, improve disclosures

- KHUSHBOO TIWARI

Underscoring the growing importance of small and medium enterprises (SME) platforms as “powerful engines” for capital formation, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on Wednesday flagged “egregious instances” of SMEs misusing regulatory relaxations, including diversion of funds and market manipulation.

“These instances adversely affected investor confidence,” Pandey said, noting that Sebi had strengthened the SME framework to ensure that only entities with sound track records are allowed to access public markets.

Speaking at the India SME Finance & Investment Summit, Pandey said the regulator is undertaking a comprehensive review of the Listing Obligations and Disclosure Requirements (LODR) Regulations to eliminate redundancy and ambiguity. Regulatory and disclosure norms applicable to SMEs are also being examined to improve ease of doing business, while retaining appropriate investor safeguards.