RBI issued guidelines for setting up a trading platform for trade receivables and bills of exchanges of Micro and Small and Medium Enterprises – MSME. In a notification issued from Mumbai, RBI said that the Trade Receivables Discounting System – TReDS should have a minimum paid up equity capital of 25 crore rupees and non-promoters would not hold over 10 per cent of the equity capital of TReDS. The foreign shareholding in the TReDS would be as per the extant foreign investment policy. According to RBI, TReDS will facilitate financing of invoices/bills of MSMEs drawn on corporate and other buyers, including government departments and PSUs by way of discounting. It would discount invoices so that final payment of the bill to the MSME is made by buyer on a due date.RBI has said that entities, other than the promoters, will not be permitted to have shareholding in excess of 10 per cent of the equity capital of the TReDS.The overall financial strength of the promoters/entity seeking to set up TReDS would be an important criteria of assessment/selection. Among others, TReDS should have sound technological basis to support its operations. It should have a suitable Business Continuity Plan including a disaster recovery site and an online surveillance capability which monitors positions, prices and volumes in real time so as to check system manipulation. Setting up of TReDS platform follows statement by RBI Governor Raghuram Rajan in September 2013 to facilitate an electronic bill factoring exchange in the country for MSMEs.