OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)

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Information about OVER THE COUNTER EXCHANGE OF INDIA (OTCEI)
Education

Published on February 22, 2014

Author: akhilkhanna7

Source: slideshare.net

Description

over the counter exchange of India , the stock exchange which help the small investors to invest in stock market. it contains all information about OTCEI with establishment,role , trading mechanism, benefits,members,dealers etc. A complete presentation regarding OTCEI

Committee G.S patel 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 SMALL INVESTORS ACCESS DELAY IN PAYMENT LIQUIDITY & DELIVERY UNCERTAINTY REGARDING PRICES

Problems of company were: RESTRICTED ACCESS TO MARKET ADMINISTERED PRICING OF ISSUE PROBHITIVE ISSUE COST

OTCEI COUNTER

UTI Canbank Financial services IDBI GIC

Nationwide Reach Computerised Trading Elimination of Trading Ring Executive Trading

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 telecommunication facilities The individual should be at least a graduate

Public Financial institutions , Scheduled banks, Mutual funds, venture capital funds. Minimum net worth Rs. 2.5 crores Must pay admission fee of Rs. 10 lakhs and Rs. 5 lakh after one year Annual Subscription fee is Rs 1 lakh Act as brokers who buy and sell securities Quote prices and perform vital function of sponsorship

Quick Settlements Transparency in Dealing Appraisal by sponsor Trading from distant locations Easy Access

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. Listing fees - initial listing fee of Rs. 6000 and an annual fee of 0.05% of its subscribed capital

The company must have a minimum 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

The company can go public on the OTC exchange by two methods PRIMARY ISSUE SECONDARY ISSUE

TRADING MECHANISM

OTC Central Computer BANK Registrar Telecom Mobile PTI Computer Counter A Counter B

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

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