OTCEI

OVER THE COUNTER EXCHANGE OF

INDIA
 SUBMITTED TO –
MRS. ANANDITA CHAKRABORTY
SUBMITTED BY –
KUMAR PARIMAL (MBA 2ND SEM.)
{ FOC, BHU (INDIA)/ MARCH 2019 }
 WHAT WE ARE GOING TO
EXPLORE —
WHAT IS OTCEI ?

SIGNIFICANCES & FUNCTIONS OF

OTCEI

PROCEDURES OF LISTING & TRADING ON

OTC
 WHAT IS
OTCEI ?exchange, provides an
OTCEI is an electronic
alternate market for the securities, which assists the/is
comprised of small and medium sized firms looking to
gain access to the capital market for raising
finance in a cost effective manner and investors with a
convenient, transparent and efficient avenue for
capital market. It was established in 1990 with an
authorised capital of 10cr. and a paid up capital of 5cr.
rupees. The corporate office is situated in Bombay. It
started functioning in 1992.

The OTCEI is ‘floor-less exchange’ where all the

activities like trading, billing, payments, etc. are
 LET’S EXPLORE WHY OTCEI
The reason for which a stock is traded over-the-
counter is usually because the company is small, making
it unable to meet exchange listing requirements like
listing fees and minimum capital requirement. Also
known as "unlisted stock", these securities are traded by
broker-dealers who negotiate directly with one another
over computer networks and by phone.
It has a national network and there is no
geographical barrier for listing. Dealers and Investors
can take decisions on the spot more quickly than on the
regular stock exchanges. It is a great boom to the
small and marginal investors who are greatly
neglected till today.
The aim at creating a fully decentralized and transport
market. Over the counter exchange means trading across
the counter in scrip. The counter refers to the location of
the member or dealer of the OTCEI where the deal or
trade takes place. Every counter is treated as trading
floor for OTCEI
PROMOTERS OFwhere
OTCEIthe investor buy or sell.
OTCEI is incorporated as
company under section 25 of the
Indian companies' act 1956.
Promoters are as followings:
• UTI • ICICI • IDBI• IFCI • GIC
• CANBANK FINANCIAL
SERVICES
•SBI CAPITAL MARKET
 SIGNIFICANCES OF
 A company at once
OTC gets nationwide listing.
 Small and growth oriented companies would be able to grow faster
as they would raise required capital through OTCEI market at a
low cost.
 Provides definite liquidity to investors. The market making system
will have two way prices which are quoted regularly to provide
sufficient opportunity for investors to exit.
 It is a ring less and electronic national floor-less stock exchange,
so anyone can avail the services of this platform while presenting
anywhere in the country.
 There is a transparency in the transactions. The bids of the sale
and purchase are accepted on the screen of the computer, so the
clients can see it themselves.
 It will encourage closely held companies across the country to
boost entrepreneurship.
 For companies, it provides a method of funds raising through
 FUNCTIONS OF
OTCEI
Listing of small and medium sized
companies
Quick settlement
Liquidity
Providing knowledge about prices
Procurement of capital
Registration of investors
Appointment of dealers
 PROCEDURES OF LISTING
The procedure adopted for the listing of shares at OTCEI is as
follows:
• OTCEI appoints a member as a sponsor for the company's
issue. The sponsor appraises the project or company on
various aspects, such as technical, managerial, commercial,
economical and financial. After appraisal, the sponsor certifies
the OTCEI regarding its appraisal.
• The sponsor determines the price of shares to be offered to
the public,
members and dealers of OTCEI.
• The sponsor after compliance with all SEBI guidelines gets
all statutory consent.
• The sponsor registers the issue with OTCEI and makes the
Trading at OTCEI will be permitted only in respect of
the securities of the listed companies. Listing may be
obtained by (i) Companies with issued equity capital
between Rs. 30 lacs to 25 crores; (ii) Closely held
companies interested in listing; (iii) Venture capital
companies; (iv) Companies which are not listed on
any other recognised stock exchange provided:
(a) they offer to the public at least 40% of the issued
equity or Rs. 20 lacs, whichever is higher, where the
issued equity ranges between Rs. 30 lacs to less than
Rs. 300 lacs (i.e. 3 crores),
(b) they offer to the public at least 60% of the issued
 The Mechanism of Trade –
OTCEI:
Investor visualizes the price on OTC screen placed
in the office of every dealer. Investor conveys decision
of purchases to the dealer. The dealer confirms the deal
and blocks the scrip on OTC computer. Investor makes
a cheque for the amount. Temporary counter Receipt
(TCR) is given to investor. After cheque clearance,
Permanent Counter Receipt (PCR) is issued in place of
TCR.
For sale, investor watches price on OTC screen
and conveys the decision to sell to the dealer. Sales
Confirmation Slip (SCS) is given by the dealer to
investor. Investor gives his PCR and Transfer Deed to
the dealer. PCR and TD are validated by the Registrar
 CONCLUSION :
Despite being in existence for a number of
years, the exchange does not have a major presence
amongst stock exchanges of the country.
However, OTCEI has played an important role in
Indian Financial system. The counter aimed at
providing screen based ring less trading facilities
cross the country. OTCEI is different from other stock
exchanges in that it offers system thereby the trading
is user friendly, smooth and computer based.
 THANK YOU FOR YOUR
TIME , PATIENCE &
EXCITEMENT
TO KNOW A LITTLE ABOUT
OTCEI.