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what is OTCEI???

Ruchika Gupta (Chartered Accountant) (247 Points)

19 February 2008

Please tell me that what is Over The Counter Exchange of India (OTCEI)? What r its special features???

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Rahul Tibrewal (A.C.A & MBA) (443 Points)
Replied 19 February 2008

The OTC Exchange of India (OTCEI) incorporated under the provisions of the Companies Act 1956, is a public limited company. It allows listing of small and medium sized companies. The minimum issued share capital required of a company that wants to be listed on OTCEI is Rs.3 million and the maximum Rs.250 million. Companies engaged in investment, leasing, finance, hire purchase, amusement parks etc., and companies listed on any other recognized stock exchange in India are not eligible for listing on OTCEI. Also, listing is granted only if the issue is fully subscribed to by the public and sponsor. OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India and others and is a recognised stock exchange under the SCR Act. Benefits: The OTCEI has set up a national, automated screen based and ringless stock market. It helps companies raise finance from the capital market in a cost effective manner and provides a convenient and effective avenue of capital market investment for investors at large. While the other recognised stock exchanges require that in order to have its securities listed the company should have an issued capital of not less than Rs. 3 crores out of which normally 25% is to be offered to the public, the minimum issued equity share capital of a company for eligibility for listing on the OTCEI is Rs 30 lacs. Listing on OTCEI is advantageous to companies because of the high liquidity of these securities, which is a result of compulsory market making, improved access and speed of transactions resulting from the extensive network of electronically interlinked counters.arial Companies can obtain a fair price of their securities by negotiating the same with the sponsors (who are members of the OTCEI) and save unnecessary issue expenses by placing their securities with the sponsors who will in turn off load the securities to the public. This mechanism is now popularly known as a bought out deal. OTCEI's wide computerized net work will be spread all over India and will make investment easier. All deals will be entered into through remote terminals which will be connected to the mainframe computer of the OTCEI. The exchange will enable transactions to be completed quickly and investors can settle the deals across the counter within a few days. The exchange will also provide liquidity to investors as every scrip listed on the OTCEI will have at least two makers who will continuously give two way quotes.

shyam (student) (544 Points)
Replied 19 February 2008

Rahul Very nice explanation

Ruchika Gupta (Chartered Accountant) (247 Points)
Replied 19 February 2008

Thanx Rahul!

pushpendra (Director- FinMAT Consultants) (1703 Points)
Replied 19 February 2008

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. ------ ----------------------- Common Grievances ------------------------- Investor grievances can be largely classified as: ------------------ Company-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 receipts Broker- related Non-rectification of documents returned as bad delivery by the broker Non-receipt of funds/ securities on sale/ purchase Procedure for grievance redressal OTCEI tries to resolve complaints received from investors at the earliest. We have devised a format for lodging complaints in order to get the required details from the investor. Complaint given a unique reference number, investor is sent an acknowledgment Complaint forwarded to Company/Registrar/Broker, who are asked to reply within 21 days If complaint unresolved within 30 days from date of acknowledgment, investor may again approach OTCEI with reference number. Investor Compensation Fund OTCEI set up the Investor Compensation Fund in 1995 to address and compensate the claims of investors and protect them in case of default or loss of security. The Investor Compensation Committee of OTCEI decides on the claims filed by the investors. Investor Claims Claims can be lodged by any class of investors for any pecuniary loss suffered on account of default or non-performance by any constituent of OTCEI. Notification of Claims OTCEI must be notified of any claim substantiated with evidence within one month from the date of first discovery of the loss by the investor, failure to do this would affect the investor's right to claim any compensation from the Investor Compensation Fund. Conversion of Counter Receipt (CR) to Certificates OTCEI ceased trading in CRs from 1st March 1999. The Companies listed on the Exchange are in the process of converting the CR to share certificates. All investors are advised to exchange their CR into certificates. Please approach any of the following IGCs for redressal of your grievances: or e-mail us at : investor @ otcei.net Please write to following email address for redressal of OSL grievances: e-mail us at : investor.osl @ otcei.net Mumbai 92, Maker Towers "F" Cuffe Parade Mumbai 400 005 Phone : (022) - 22188164/22188165 Fax : (022) - 22188503