Question

Over the counter exchange of India - (OTCEI) and its features?

Answer 1

Meaning: -

OTCEI is the abbreviation of Over the Counter Exchange of India. This is the country’s first ringless and scrip less electronic stock exchange where trading of the securities is done on the computer through networking of the computers. OTCEI was incorporated under the provisions of section25of the companies Act, 1956, with the intention to protect the interest of small investors and small companies. Small companies find it difficult to get their shares and debentures listed on stock exchanges. As a result, their securities become untradeable and lack liquidity. OTCEI was established in October 1990 and was promoted by a consortium of financial institutions.

FEATURES:

1. OTCEI provides trading facilities in the securities of small companies which could not meet the listing requirements of a stock exchange.
2. It has nationwide coverage through its dealers.
3. It offers ringless and screen-based trading through a fully automated system. Transactions are made through satellite communication networks.
4. Small companies with a paid-up capital between Rs. 30Lakh and Rs. 25 Crore are eligible for the listing of OTCEI. Companies listed on any other recognized stock exchange cannot be listed on OTCEI and vice-versa.