INTRODUCTION

Over the Counter Exchange of India (OTCEI) was incorporated in October 1990 Convenient, efficient and transparent platform for dealing in shares and stocks 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.

FEATURES and FUNCTIONS OF OTCEI

Ring less and Screen-based Trading Sponsorship Transparency of transactions Listing of small and medium sized companies Technology Nation-wide listing

Major Players in OTCEI Market

Members Dealer. The activities of the members and dealers are: Act as Broker Market makers in securities: They quote the prices at which members are willing to buy and sell the specified number of securities

ELIGIBILITY CRITERIA FOR LISTING

Minimum paid-up capital of Rs. 30 lakhs The minimum offer to the public 25% of the issued capital or Rs. 20 lakhs worth of shares in face value, whichever is higher. Every company that intends to get listed has to be sponsored by a merchant banker (MEMBER/SPONSOR) of the Exchange. Arrange for Market makers to give Buy & Sell quotes in the securities for an initial period of 18 months

Companies that do not fulfill the following conditions are also eligible for listing on OTCEI
3 year dividend paying record in the last 5 years Appraisal and funding by financial institutions will be allowed to raise funds by listing on OTCEI, provided they are: a)Sponsored by a Member / Sponsor of OTCEI b)Appoint at least 2 market makers for continuous liquidity to their shares Bought out deals undertaken earlier and all future which may not fulfill the 3 year dividend record/ financial institution appraisal and funding criteria.

QUALIFYING NORMS
1) COMPANY VALUATION
Net Tangible Assets (or) Market Capitalization (or) Net Income (in latest fiscal year or 2 of last 3 fiscal years) Rs. 1 crore (or) Rs. 5 crores (or) Rs. 0.25 crores

2) SHAREHOLDING
Minimum Total Float (shares) Min. Public Float (shares) Market Value of Public Float Minimum Offer to the public (as % of total paid-up capital) Minimum no. of shareholders 1000 11,00,000 5,00,000 Rs.2.50 crores 25%

3) MARKET MAKING
No. of Market Makers Duration of Market Making Obligation Market making inventory Minimum 2 18 months Mandatory Graded

(at the time of the public issue)

4) COMPANY FACT FILE Operating History (or) Minimum Market Capitalization Corporate Governance Compliance Standards
1 year (or) Rs. 5 crores Yes No defaults

Additional Requirements for Finance Companies

Registration with RBI as Compulsory NBFC Investment grade rating in case of FDs or Debenture issues Continuous Profitability Past 3 years Market making Inventory Principal and Additional 10% min together Market maker Debt Equity ratio As per RBI guidelines

LISTING PROCEDURE
Appointment of Sponsor Sponsor to appoint Market Makers The sponsor determines the price of the company shares offered to the public The sponsor gets all statutory consent and compliance with all the SEBI guidelines Sponsor registers the issue with OTCEI Listing application has to be made with OTCEI After the approval, the allotment is made

BENEFITS OF OTCEI
Benefits of OTCEI Listing for Companies
Small and medium closely-held companies can go public. The OTCEI encourages entrepreneurship. Small companies can get listing benefits. Easy issue marketing by using the nation-wide OTCEI dealer network. Nation-wide trading by listing at just one exchange.

Benefits of Trading on OTCEI for Investors

The OTCEI trading counters are easily accessible by any investors. The OTCEI provides greater confidence to investors because of complete transparency in deals. At the OTCEl, the transactions are fast and are completed quickly. The OTCEI ensures security, liquidity by offering two-way quotes. The OTCEI is an investor friendly exchange.