Question

Listing of securities with a stock exchange involves stringent procedures. Small companies find it difficult to undergo is such formalities. Therefore, when such companies issue shares, there are only a few buyers for them.

1. Identify the stock exchange promoted to solve these problem faced by small companies.

2. List out the main features and advantages of this stock exchange.

Answer 1

1. Over the Counter Exchange of India (OTCEI): 

The OTCEI is a company incorporated under the Companies Act 1956. It was set-up to provide smalt and medium companies an access to the capital market.

It is fully computerised, transparent, single window exchange which provides quicker liquidity to securities at a fixed and fair price, liquidity for less traded securities. It is commenced trading in 1992.

2. Objectives of OTCEI

• Provide a trading platform to smaller and less liquid companies.
• Provide online trading facilities to the investors. 
• Ensure a transparent system of trading. 
• Ensure liquidity to the listed securities. 
• Help the investors to exchange the securities at minimum cost.