What Is the Over-The-Counter Exchange of India (OTCEꦰI)?

The Over-The-Counter Exchange of India (OTCEI) is an electronic stock exchange based in India that consists of small- and medium-sized firms aiming to gain access to overseas capital markets, including electronic exchanges in the U.S. such as the NASDAQ. There is no central place of exchange, and all trading occurs thro🌌ugh electronic networks.

Understanding the Over-The-Counter Exchange of India ♛(OTCEI)

The OTCEI is based in Mumbai, India, and operates solely over a computer network. The exchange is recognized by India's Securities Contract Regulation Act, meaning all listed stocks on the OTCEI benefit equally as other listed 澳洲幸运5官方开奖结果体彩网:securities on other exchanges in India.

The exchange was established in 1990 to provide investors and companies with an additional way to trade and issue securities. It arose primarily from small companies in India finding it difficult to raise capital through mainstream national stock 澳洲幸运5官方开奖结果体彩网:exchanges because they could not fulfill the s🥀tringent requiremeꦆnts to be listed on them.

The OTCEI has rules that are not as rigid as the national exchanges, allowing small companies to gain access to the capital they need to grow. The objective is that once they grow to a certain level and are able to meet the requirements to be listed on the national 澳洲幸运5官方开奖结果体彩网:stock exchanges, they w♍ill make the switch over and lea♔ve the OTCEI behind.

Thanks to advances in technology that have yielded improvements in electronic trading platforms, the differences between traditional exchanges and 澳洲幸运5官方开奖结果体彩网:over-the-counter (OTC) networ🐓ks are no lon൲ger vast, greatly benefiting the small- and medium-sized companies.

Features of🍰 the Over-The-Counter Exchange of India (OTCEI)

The OTCEI has some special features that make it aꦜ unique exchange in India as well as a growth catalyst for small- to medium-sized companies. The following are some of its unique feat🐼ures:

• Stock Restrictions: Stocks that are listed on other exchanges will not be listed on the OTCEI and, conversely, stocks listed on the OTCEI will not be listed on other exchanges.
• Minimum Capital Requirements: The requirement for the minimum issued equity capital is 30 lakh rupees, which is approximately $40,000.
• Large Company Restrictions: Companies with issued equity capital of more than 25 crore rupees ($3.3 million) are not allowed to be listed.
• Member Base Capital Requirement: Members must maintain a base capital of 4 lakh rupees ($5,277) to continue to be listed on the exchange.

Overꦡ-The-Counter Exchange of India (ꦡOTCEI) Listing Requirements

The OTCEI makes it easier for small- to mid-cap sized companies to be listed, althou♔gh there are still some requirements that companies must meet before 🎶being allowed to be listed.

Stipulations include acquiring sponsorship from members of the OTCEI and having two 澳洲幸运5官方开奖结果体彩网:market makers. In addition, once a company is listed, it cannot be delisted for at least three years, and a certain percentage of issued equity capital needs to be kept by promoters for a ♔minimum of three years. This percentage is 20%.

Over-The-Counter Exc🀅hange of 🍒India (OTCEI) Transactions

The transactions on the OTCEI revolve around the dealers. Dealers operate in a few capacities, the two most important being as a broker and as a market maker. As a broker, the dealer transacts on behalf of buyers and sellers. As a market maker, the dealer has to ensure the availability of the shares for transaction purposes as well as to ensure that the price remains reasonable through 澳洲幸运5官方开奖结果体彩网:supply and demand levels.

In addition to the dealers, the OTCEI also has custodians. The 澳洲幸运5官方开奖结果体彩网:custodian, or settler, is the individual that performs the multitude of administrative tasks necessary for the proper functioning of the OTCEI. These tasks include validating and storing documents as well as facilitating daily clearing transactions.

Finally, the last group of players consists of the 澳洲幸运5官方开奖结果体彩网:registrars and 澳洲幸运5官方开奖结果体彩网:transfer agents, who are responsible for making sure the correct transfer🐟 and allotment of shares take place.