Institutional trading platform
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The document discusses SEBI's new Institutional Trading Platform (ITP) which aims to allow small and medium enterprises easier access to capital markets. The key points are: 1) The ITP regulations create a new trading platform to allow SMEs to list specified securities with less stringent requirements than an IPO, in order to raise funds and visibility. 2) To be eligible, companies must meet certain criteria such as revenues under 100 crores, paid up capital under 25 crores, and a minimum net worth. 3) Listing on the ITP requires disclosing information and promoters must hold 20% of post-listing capital for 3 years. The minimum trading lot is Rs. 10 lak
Institutional trading platform
- 1. INSTITUTIONAL TRADING PLATFORM AN INITIATIVE BY SEBI
- 2. SEBI (Listing of Specified Securities on Institutional Trading Platform) Regulations, 2013 (“ITP Regulations”) A New Chapter to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR Regulations”).
- 3. Why a new Trading Platform To allow small and medium enterprises (SMEs) to enlist their specified securities, To subsume the lengthy process of IPO for SMEs and startups wider visibility and will allow them to raise capital through trading of specified, easier exit option for informed investors, provide better visibility, wide investor base and greater fund raising capabilities to start-ups and SMEs.
- 4. Eligibility Criteria Any SME or startup (Company) not listed any securities in any stock exchange in India. Not a willful defaulter, or a sick company. Revenues does not exceed 100 crores in any of the previous financial years, or paid up capital of the company is not more than 25 crores. minimum net tangible asset of rupees one crore or the net income of the company is not less than rupees 50 lakh Continue..
- 5. no change in the promoters of the company in last one year from the date of filing of application not be more than 10 years from the date of incorporation and it should have audited financial statement for the previous financial year.
- 6. Some Listing Requirements To file an information document containing certain specific disclosures At least 20% of the post listing capital is required to be held by the promoters of the SME which shall be locked-in for a period of three years from the date of listing on the ITP minimum trading lot on ITP will be Rupees ten Lacs.
- 7. Private Placeme nt Right Issue in-principle permission of the stock exchange & approval of the shareholders of the company, disclosures to be made in an explanatory statement to the shareholders and complete the allotment within two months of obtaining such approval. in-principle permission of the stock exchange & send letter of offer to the shareholders through registered post or speed post or through electronic mail and also publish such notice in the website of the company and the stock exchange.
- 8. Exit Scheme its shareholders approve such exit through a special resolution with 90% of total votes and the majority of non-promoter votes in favour of such proposal, the recognized stock exchange where its shares are listed approves such exit.
- 9. Conclusion The new platform aid SMEs in getting access to capital as well as wider visibility. ITP Regulations are framed with the intention of allowing easier exit options for the informed investors who risk their capital to support SMEs.