SME exchange not immediately on the cards

BSE and MCX have filed their preliminary applications with SEBI to launch SME exchanges but there is little chance of this segment coming up in the near future

Since previous attempts to launch an exclusive platform for small and medium enterprise (SME) have failed, market regulator Securities and Exchange Board of India (SEBI) is moving cautiously about green signalling the idea again. The regulator is currently seeking feedback from the market to ascertain the impediments, which surfaced in its past efforts, to launch an SME exchange.

Unfortunately, this means that there has been no headway in finalising what the framework of an SME exchange will be. India has made two attempts to set up SME exchanges but both these attempts failed. The country's oldest exchange for SMEs, Over-The-Counter Exchange of India (OTCEI), was set up in 1989. It failed because of technology issues as well as regulatory confusion over what needs to be done to make it grow. The extremely lax regulations for new issues in 1994-95 encouraged companies to easily list in National Stock Exchange and the Stock Exchange, Mumbai (BSE), ignoring OTCEI. OTCEI also relied on the market-making system and market makers simply vanished after 1995. Under the next experiment, the BSE was directed to launch IndoNext Platform for SME in 2005 because that's what the then finance minister P Chidambaram wanted. But all BSE did was push out some poor quality and illiquid scrips to that segment.

SEBI is has been making some tentative attempts to launch an SME market for a few years now. The regulator came out with the guidelines for the SME exchanges on May 17, 2010.

"Attempts in India to establish exchange of small company is not a new attempt. Unfortunately these attempts did not work. A new attempt is being made. We will take a very constructive approach. We are conscious of the fact that small companies cannot bear the same kind of compliance cost that the bigger companies find it easy to do and therefore we are trying to reduce the compliance cost. As a regulator we need to keep a balance. We also need to protect the interest of the investor who are coming in and investing in their markets.

Compliance cost cannot be at the cost of not providing enough information to the investors who are going to invest. We are trying to do it in a manner where our chances of success improve" said C B Bhave at an event organised by small and medium enterprise (SME) Chamber of India, Mumbai recently.

Asia's oldest bourse BSE and the Multi Commodity Exchange (MCX) have filed a preliminary application with the capital markets regulator SEBI for launching an SME platform. "We have filed a preliminary application with SEBI for an SME exchange" said Madhu Kannan, MD & CEO, Bombay Stock Exchange (BSE).

Mr Joshep Massey, MD & CEO of Multi Commodity Exchange Ltd (MCX) also shared a similar plan "We have applied for an SME exchange." Even the National Stock Exchange is believed to have expressed its interest to launch an SME exchange. However, Mr Bhave did not clarify on the timeframe it is looking to launch this platform and said that "the ball is their (exchange's) court."


Market Preview: Positive opening likely

Economic indicators, corporate earnings will drive the market this week

The market is likely to see a positive opening on the back of positive global cues and ahead of the April-June corporate earnings seasons, which kicks off this week. However, key economic indicators will also be instrumental in giving direction to the market.

 On the global front, Wall Street witnessed a positive close on Friday, making it the best weekly closing in the year. The Dow gained 59.04 points (0.58%) to 10,198.03. The S&P 500 gained 7.71 points (0.72%) to 1,077.96. The Nasdaq gained 21.05 points (0.97%) to 2,196.45. All major indices rallied around 5% for the week.

 Markets in Asia have opened in the positive zone this morning. Key indices like the Shanghai Composite, Hang Seng, Nikkei 225 and Straits Times are trading with gains in the range of 0.31% to 0.48%. The SGX Nifty is trading 16 points higher at 5,369 (0.30%).

 Back home, investors will keenly watch the Index of Industrial Production (IIP) data to be announced later in the day. IIP for the month of April grew 17.6% as against 13.5% in previous month led by growth across all the sectors. However, while the data for May is expected to be marginally lower, it will be in double digits though, indicating that the economic recovery is on track.

 Besides, the wholesale price based (WPI) inflation for June will be announced by the government on 14th July. The inflation figures are expected to touch 11% following a hike in fuel prices by the Centre late last month.

 The first quarterly corporate earnings seasons kicks off this week, with IT strongman Infosys will announce its results on Tuesday (13th July). Estimates indicate that the numbers would be slightly lower. On the whole, the earnings are expected to be in line with market expectations.


Beware of 32GB, 64GB flash drives sold near railway stations

Street vendors across Mumbai are selling 32GB and 64GB USB flash drives dirt cheap. Are these flash drives genuine and do they have the capacity claimed in the package?

Lately, there has been an upsurge in the number of vendors selling 32GB and 64GB USB flash/pen drives near railway stations in Mumbai. Since they sell it for as low as Rs150 to Rs300, many a time, people, including IT professionals, tend to buy it. However, most of these pen drives are fake. Genuine, standard and branded 2GB flash drives cost Rs300, 4GB Rs400 while 16GB flash drives are available for over Rs1,400.

There are two points, you must consider before even thinking about buying a pen/flash drive from a street vendor. One, why would anyone sell it for such a low price, and what about its warranty? Second, it is not easy to test the quality and capacity of these products, especially when you're in a crowded street. Here are some points to identify these fake USB flash drives.

1. Mostly, the fake USB flash drives on sale in Mumbai are supposed to be manufactured by JetFlash. However, JetFlash has a separate mechanism to label its flash drives according to its size. Genuine flash drives from JetFlash is marked with different colours (see the image). In the accompanying image, the USB flash drive with 1GB capacity is marked with a light blue strip while the 2GB drive is marked in orange. Similarly, 4GB, 8GB and 16GB flash drives are marked in green, violet and pink, respectively. The fake flash drives sold near railway stations often carry a green strip, meaning their real capacity is 4GB and not 32GB or 64GB, as mentioned by the vendor.

2. When buyers complain about flash memory items not being usable at their advertised capacity or about dubious information, these street vendors are very good at conning buyers into believing the items sold were faulty or defective. This is not the case.

3. When someone plugs a fake USB flash drive into a PC or laptop, he often discovers that its capacity is not what is claimed by the vendor or found on the packaging. These flash memory chips are digitally altered using low-level formatting tools, mostly in FAT16 format. This was the disk format used by Microsoft for its Windows 95 and earlier versions. What's shocking is that FAT16 does not even support more than 2GB, while the fake USB flash drive shows '32GB' or '64GB' on the package.

4. How can one test the genuineness as well as the actual capacity of a fake flash drive. There is a small software available, called H2testw (
&sa=X&oi=translate&resnum=2&ct=result&prev=/search%3Fq%3DH2testw%26hl%3Den%26sa%3DG ). The software comes in a zipped format. You need to unzip the files and run the program. There is no need to install it on your PC or laptop. H2testw does a write and verify test on the selected drive and provides the results in a simple-to-understand text file. For a fake 64GB USB flash drive, the software displays the following message: 'The media is likely to be defective'
3.8 GByte OK (8084847 sectors)
58.6 GByte DATA LOST (122921617 sectors)
Details:710.5 KByte overwritten (1421 sectors)
7.6 MByte slightly changed (< 8 bit/sector, 15630 sectors)
58.6 byte corrupted (122904566 sectors)
710.5 KByte aliased memory (1421 sectors)
First error at offset: 0x000000003cef8470
Expected: 0xeb7ac43a237c5170
Found: 0xeb7a843a237c5170
H2testw version 1.3
Writing speed: 9.24 MByte/s
Reading speed: 10.8 MByte/s
H2testw v1.4

The '3.8 Gbyte OK' message means that the capacity of this fake USB flash drive is 4GB. The second line (58.6 GByte DATA LOST) tells you about the claimed capacity that does not exist on the drive. This means that the fake 64GB flash drive has a capacity of only 4GB.

We hope this article helps in identifying fake USB flash drives. It is always a better option to buy such products from a reputed vendor who provides a bill of receipt. 




7 years ago

Thanks for cautioning the buyers with a wonderful and informative article.

You guys are excellent in spreading awareness amongst people, be it in the field of Finance, IT, Auto and many more field. Keep up the good work.

Paulson Paul C

7 years ago

One of my friend baught five such pen drives from one street vendor. Since he had a laptop with him, he tested one of the pieces by copying large chunks of files. Being satisfied after seeing all the copied files on the drive he baught them. But after reaching home he checked again and was shocked to find that only the file icons were copied, not the actual files.

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