PRESENTATIONON

OTCEI

From: ABHISHEK BANSAL 1710118

Over the counter exchange of India was incorporated in 1990 as a Section 25 company under the Companies Act 1956 and is recognized as a stock exchange under Section 4 of the Securities Contracts Regulation Act, 1956. The Exchange was set up to aid enterprising promoters in raising finance for new projects in a cost effective manner and to provide investors with a transparent & efficient mode of trading.

OTCEI 

Studies by NASSCOM, Software Technology Parks of India, the venture capital funds and the government's IT Task Force, as well as the rising interest in information technology, pharmaceutical, biotechnology and media shares have repeatedly emphasised the need for a national stock market for innovative and high growth companies. 

Need for OTCEI?

high-technology enterprises companies with high growth potential companies focussed on new product

development . entrepreneurs seeking finance for specific

business projects

Who would find OTCEI helpful:

Sonora tiles, VIP Advanta, Brilliant Mineral Water & the OTC Exchange?

Just what is the connection between these products and the OTC Exchange, you may ask. The answer is that these are popular products made by companies listed on the OTC Exchange of India (OTCEI).

OTCEI is the primary Stock Exchange for these securities. The Company issuing the security enters into an agreement to comply with all the regulations of the Stock Exchange. The securities can be bought or sold through the brokers all over India.

LISTED SECURITIES

OTCEI in 1993, became the first Exchange in the country to open Investor Grievance Cells (IGCs) at four Metros - Chennai, Delhi, Kolkata and Mumbai. The IGCs handle complaints/ queries from investors against brokers and/or companies listed on the OTCEI.

INVESTORS

Base Minimum Capital deposited with the Exchange:

The minimum base capital is Rs.4 lakhs.

All members have to comply with the Base Minimum Capital requirements before their activation. The members may opt for Base Minimum Capital by way of Cash, FDRs, Bank Guarantee or Securities.

Cash to be deposited with the Exchange- minimum 25 % i.e. Rs. 1 lakh

 Deposit of Fixed Deposit Receipts (FDRs)- (25 %) issued by approved banks

 Deposit /lodgement of Securities- (maximum 50 %) with approved custodian (HDFC Bank Ltd.) with 20% margin.

Irrevocable Bank guarantees (in lieu of securities - maximum 50 %) from approved banks

Common Grievances: Investor grievances can be largely classified asCompany-related Non-receipt of securities sent for transfer Non-receipt of corporate benefits,

e.g.dividends/interest/bonus/rights,etc. Non-receipt of share certificates in exchange for

counter receiptsBroker- related Non-rectification of documents returned as bad

delivery by the broker Non-receipt of funds/ securities on sale/

purchase 

demonstrate an understanding for new technology and concepts

provide capital formation opportunities for young companies without a track record

be national in order to reach and service entrepreneurs and investors

enable access to a wide spectrum of financial intermediaries

be cost effective for issuers provide an exit route to venture capital & private

equity funds for their investments adopt state of art trading systems and practices in

tune with international norms

BENEFITS

ICICI Bank Limited Administrator of Specified Undertaking of

Unit Trust  of India IDBI Bank Limited. SBI Capital Markets Limited IFCI Limited Life Insurance Corporation of India Canbank Financial Services Limited General Insurance Corporation of India

PROMOTERS

As part of the Dave Committee report in 1996, it was suggested that equity shares of unlisted companies should be allowed to be traded on OTCEI. In this context, the exchange has designed the trading rules and the market guidelines for the initiation of Trading in Unlisted Securities and the same has been submitted to SEBI for approval.

New Initiative

ThankYou