2 Answers
Over the Counter Exchange of India (OTCEI) was incorporated in 1990 under the Companies Act, 1956 and was recognised as a stock exchange under the Securities Contracts Regulation Act, 1956. It commenced operations in the year 1992. It aims at providing the small and medium companies an easy access to the capital market. OTCEI is a fully computerised and single window exchange system. OTCEI is modelled along the lines of NASDAQ, the OTC exchange in USA. OTC was promoted by UTI, ICICI, IDBI, LIC, IFCI, GIC and SBI financial services. It does not involve a geographical area rather, trading takes place through its counters or offices through telephones and other modes of communication. It acts as a place where buyers meet the sellers and negotiate for an acceptable terms of trade. It provides a convenient, transparent and efficient avenue for capital market investment. It incorporates an exclusive list of companies as only those companies which have an issued capital of 30 lakh or more can be listed on OTCEI. It provides liquidity to the securities along with practicing a fair trade system. It also aims at providing cheaper and easy means of trade to public as well as small companies.
The OTCEI is a company incorporated under the Companies Act, 1956. It was set up to provide email and medium companies access to the capital market for raising finance in a cost-effective manner. It is a fully computerized, transparent, single-window Exchange that commenced trading in 1992. This exchange is established on the lines of NASCAR the OTC exchange in USA. It has been promoted by UTI, ICICI, IOBI, IFCI, LIC, GIC, SBI, capital markets, and Canbank financial services.
It is a negotiated market place that exists anywhere as opposed to the auction market place, represented by the activity on a securities exchange. Thus, in the OTC, exchange, trading takes place when a buyer or seller walks up to an OTCEI counter, taps on the computer screen, find quotes and effects a purchase or sale depending on whether the prices meet their target.