G.

S patel
ESTABLISHMENT
committee,

Committee

committee,
Abid
Hussain
committee
.

Incorporated

October
1990

Functioning

September
1992

Capital

8 crore.

OTCEI was needed to solve the

problems of
small investors and company

Problems of company were:

COUNTE
OTCEI
R

FEATURES OF OTCEI
Nationwi
de
Reach
Computeri
sed
Trading

Eliminati
on of
Trading
Ring

Executi
ve
Trading

WHO CAN BE DEALERS

Individuals
,partnership
firms and
corporate
entities

Have to pay
one time non
refundable
admission fee
of Rs. 2 lakhs

Minimum net
worth of Rs. 5
lakhs

Annual
subscription
fee of Rs.
5,000

Adequate
office space
and
telecommunica
tion facilities

The individual
should be at
least a
graduate

Quote
Must pay
admission
prices and
Act as
Annual
perform
brokers
fee of Rs.
Subscripti
vital
who buy
10 lakhs
on fee is
function of and sell
and Rs. 5
Rs
1 lakh
sponsorshi securities
lakh after
one year
p

Minimum
net worth
Rs. 2.5
crores

Public
Financial
institutions
, Scheduled
banks,
Mutual
funds,
venture
capital
funds.

WHO CAN BE MEMBERS

BENEFITS OF OTCEI
Quick
Settleme
nts

Transpare
ncy in
Dealing
Appraisa
l by
sponsor
Trading
from
distant
locations

Easy
Acces
s

PROCEDURE OF LISTING
An OTCEI member is appointed as a sponsor of
the company`s issue. He appraises the project
/ company on technical, managerial,
commercial, economical and financial aspects .

The sponsor determines the price of the

company shares offered to the public ,
members and dealers of the OTCEI

The sponsor gets all statutory

consent and compliance with all
SEBI.

The sponsor registers the

issue with OTCEI and places
the equity
The listing application has to
be made to the OTCEI as per
its rules and regulations
After getting approved, the
allotment is made.
initial listing fee of Rs. 6000
and an annual fee of 0.05% of its
subscribed capital

Listing fees -

GOVERNMENT
GUIDELINES FOR
The company
must have a minimum
LISTING
issued equity capital of ` 30 lakh

Companies with an issued equity

capital >` 30 lakh < ` 300 Lakh,
the minimum public offer should
be 40% of the issued capital

The companies with an issued equity

capital > ` 300 lakh will follow the
listing requirements and guidelines.

A company with capital > ` 10

crore will not be eligible for
listing.
The companies engaged in investing,
leasing, finance, hire-purchase ,
amusement parks etc are not eligible
for listing

METHOD OF
OFFER
The company can go public on the OTC
exchange by two methods

PRIMAR
Y ISSUE SECONDA
RY ISSUE

TRADING
MECHANIS
M

OTC Central
Computer

BANK

Registrar

Telecom Mobile
PTI Computer

Counter
A

Counter B

SETTLEMENT
SYSTEM

At present the settlement procedure has five

days trading cycle

Short sales and squaring up have to be done

with in the trading cycle and certificate to the
investors must be delivered within a fortnight
from the date of purchase . It avoids the
speculation
Forward trading is not allowed in OTCEI

This settlement procedures are different for

the listed securities and the permitted
securities