BSE suggests compulsory market making for SMEs, start-ups

Bombay Stock Exchange has suggested that market making be made compulsory for all stocks listed in the SME Exchange and Hi- tech platforms.

New Delhi: To boost liquidity in capital markets, top stock exchange BSE has suggested that market making be made compulsory for all stocks listed in SME segment as also scrips of start-ups to be listed on Hi-Tech platforms.

Apart from stocks listed on SME and Hi-Tech platforms, market making be a must for main board companies having market capitalisation of less than Rs 200 crore, it said.

BSE has also suggested that market making be made compulsory for all corporate and government bonds.

In a presentation to the Finance Ministry, the exchange has also suggested a number of other measures to shore-up liquidity in the capital markets.

Market makers, entities or dealers in securities or other assets, undertake to buy or sell at specified prices at all times. It is particularly required for small lots so that investors can enter and exit quickly.

For small and medium enterprise (SME) exchange, a stock broker needs to be registered as a market maker for a minimum period of three years.