Exchange for SMEs being discussed: Bhave

"The SME exchange is an issue we are looking at and as and when we feel that necessary conditions are in place, we will allow that," Sebi Chairman C B Bhave said at a function to launch interest rate futures at the National Stock Exchange today.

On extension of trading hours at the NSE, Bhave said Sebi's secondary market committee has discussed the issue.
"Our secondary market committee is looking at it and a committee with exchanges in it has been constituted to look at the practical aspects of this (extension of timing)," Bhave said.

"If we find it practical, we will take it back to the secondary market advisory committee," he said.
There has been a suggestion that trading timings should be extended beyond the present 1530 hours period.
SEBI today said it has suggested setting up a committee of stock exchanges and market participants to look into the issue of extending trading hours on bourses.

Earlier in March, the market regulator proposed extending trading hours of the Indian bourses in an attempt to align them with that of their global peers.

While trading on other Asian bourses commence little ahead of the Indian markets, the European and American markets open much later. The Indian market trades for five-and-a-half hours from 9:55 am to 3.30 pm.
SEBI had floated a discussion paper through which the market players were to give their views on extending market hours of trading by April 10, 2009. Bhave said there are some practical problems that still needs to be studied. "Let us first understand what are the issues," he added.

To a query on introduction of more products, the Sebi Chairman said, "we want to see how to introduce more products on the exchange traded platform and settle through a central clearing entity which gives settlement guarantee."

Bhave also said the time was not yet ripe for the introduction of interest rate futures in more currencies but Sebi was open to the idea. At present, it is allowed only between the Rupee and the Dollar.

Aim is to reduce IPO allotment time
SEBI said it will consider reducing the allotment period for Initial Public Offers to five days, if the alternate system of payment for public issues, that gained strength in the recent NHPC offering, picks up further.
The alternate system-- Application Supported by Blocked Amount (ASBA)-- allows releasing applicants' money only if the allocation is made.
The main difficulty in reducing the period for allotment of public issues is the fact that a lot of physical applications along with the physical cheques have to be cleared in the system, Bhave told reporters on the sidelines of the convocation of the Institute of Insurance and Risk Management (IIRM) of IRDA.
If ASBA process becomes more popular, SEBI aims to reduce the IPO allotment period to five days, he said.
"So it is our hope that as the ASBA process becomes more popular, this processing will get reduced and then we will be able to reduce the time line," Bhave said.
At present, it takes around two weeks for allocation of public issues and around three weeks for them to be listed after they close.
Bhave said 1.5 lakh applications were made through the alternative system for NHPC IPO, which closed earlier this month.

SEBI expects trade in interest rate futures in two months
SEBI also said that it expects stock exchanges to launch interest rate futures in the next couple of months.
Interest rate futures are products designed as a hedge against risk because of volatility in interest rates.
"My information is that stock exchanges are in a fairly advanced stage of preparation. We should see some results in the next couple of months," SEBI Chairman C B Bhave told reporters on the sidelines of the convocation of the Institute of Insurance and Risk Management (IIRM).
A joint committee of Reserve Bank and SEBI has already released its report on interest rate futures. Earlier, SEBI had called for applications from the stock exchanges to start the market in interest rate futures.
The committee had recommended that these products be exempted from the Securities Transaction Tax. It also suggested that these contracts initially be based on the 10-year government security yield.
Earlier on August 19 the National Stock Exchange had said it was likely to launch interest rate futures soon after getting approval from the Securities and Exchange Board of India.
"We are working towards the launch of interest rate futures in a few weeks," NSE's Managing Director and CEO Ravi Narain had said in Mumbai.

AMFI has finalized design on separate MF platform
The Association of Mutual Funds in India has finalised a design on a separate common platform for mutual funds, according to Bhave."We recently had a meeting with the mutual funds and what the Association of Mutual Funds of India (AMFI) told us is that they have more or less frozen the kind of design that they want," he said.
"They will now look to competitive vendors for deciding on what kind of platform needs to be set up," Bhave added.
AMFI is planning to set up a common platform for the MFs which would allow retail investors to trade, switch over and compare the schemes online through a single window.
A common trading platform will not only enable investors to compare the performance of funds, but reduce the costs associated with investments in mutual funds, he added.
The idea is to provide all fund houses and distributors a single platform where investors can have the true sense of choice and an MF investor can access this common platform and choose the scheme that he wants to invest in.
At present there are 38 mutual fund companies in the country.