Over The Counter Exchange of India OTCEI

The first electronic OTC stock exchange in India was established in 1990 to provide investors and companies with an additional way to trade and issue securities. This was the first exchange in India to introduce market makers, which are firms that hold shares in companies and facilitate the trading of securities by buying and selling from other participants.

The OTCEI was incorporated in October, 1990 as a Company under the Companies Act 1956. It became fully operational in 1992 with opening of a counter at Mumbai. It is recognised by the Government of India as a recognised stock exchange under the Securities Control and Regulation Act 1956. It was promoted jointly by the financial institutions like UTI, ICICI, IDBI, LIC, GIC, SBI, IFCI, etc. The Features of OTCEI are :1. OTCEI is a floorless exchange where all the activities are fully computerised. 2. Its promoters have been designated as sponsor members and they alone are entitled to sponsor a company for listing there. 3. Trading on the OTCEI takes place through a network of computers or OTC dealers located at different places within the same city and even across the cities. These computers allow dealers to quote, query & transact through a central OTC computer using the telecommunication links. 4. A Company which is listed on any other recognised stock exchange in India is not permitted simultaneously for listing on OTCEI. 5. OTCEI deals in equity shares, preference shares, bonds, debentures and warrants. 6. The Participants of OTCEI are :i. Members and dealers appointed by OTCEI, ii. Companies whose securities are listed, iii. Investors who trade in the OTCEI, iv. Registrar who keeps custody of scrip certificates, v. Settlement Bank which clears the payment between counters, and vi. SEBI and Government who supervise and regulate the working.