"We will put in place an SME exchange. This should hopefully happen in the year 2008," Damodaran said, while inaugurating the 5th Annual Conference on Capital Markets organised by FICCI.
The SEBI Board has already given an in-principle approval for the proposal in its last meeting, he said.
"A large number of regional stock-exchanges have come up with proposals to start an exchange for SMEs. We are not too sure whether they are the right candidate -- we will look at those who are capable of putting up an exchange," he said.
SEBI, however, would not like fragmentation and hence would not want more than one SME exchange, he said.
Damodaran also said all fines and penalties imposed and received by SEBI would go into the Investor Protection and Education Fund after the SEBI Act is amended.