NAGINDAS

KHANDWALA COLLEGE

PRSENTED TO:-
KINJAL MAM
OTCEI AND NSE
 GROUP MEMBERS:-

NIRAV BHAUVA 503

CHARMI GALA 510

HIRAL RAVAL 533

NIDHI SHAH 539

SHIKHA SHAH 545

RADHIKHA SHETTY 548

HARSHITA VORA 553

 INTRODUCTION:-
 The growth of capital market and money market which constitute
important components of the financial system is crucial for the economy.

 A number of specialized institutions have been created consciously to

strengthen the capital market and money market.

 This describes functions and working of two new such institutions viz.

1.Over the Counter Exchange of India

2.National Stock Exchange
 OTCEI:-

 The OTCEI was incorporated in 1990 .

 The OTCEI is recognized by the government of India as a

recognized stock exchange.
FEATURES:-

 It is a national ring less and computerized exchange.

 It deals in equity shares, preference shares, bonds,

debentures and warrants.

 Transactions would take place through satellite

communications ‘telephone lines’.
 PROMOTERS:-

 The OTCEI has been promoted by all India financial

institutions, namely, UTI, ICICI, IDBI, IFCI, LIC, GIC, SBI
Capital Markets and Can Bank Financial Services Ltd.

 The top executives of the promoters are on the Board of

Directors of the OTCEI OTCE operations are supervised by
SEBI and the Government of India
 PARTICIPANTS OF THE OTCE
MARKET:-
 Members and Dealers appointed by OTCEI

 Companies whose securities are listed on OTCEI

 Investors who trade in the OTCEI

 Registrar

 Settlement Bank

 SEBI and Government which exercises an overall supervision on OTCEI

 TRADING IN OTC EXCHANGE:-

 Every investor is required to register with OTC prior to

trading.

 The registration is, at present, done free of cost.

 The purpose of investor registration is to facilitate

computerized trading.
 Steps Involved in Buying/Selling Scrip’s:-

In case of buying:
 Make cheques for payment.
 Get the Counter Receipt (CR). The CR is tradable and contains all
information which appears on a share certificate.
 Return CR when cheque is cleared.
 Collect final CR within 7 days.

In case of selling:-
 Give CR and Transfer Deed (TD) to counter.
 Receive Sales Confirmation Slip.
 Return when CR and TD are cleared and collect cheque.
 
 Depository System:-

 The OTCEI’s unique depository system enables convenient

and faster settlement for investors.

 The settlement on the OTC exchange takes place on a rolling

basis two days after the day of trade.

 The OTC Counter is truly a single window for investments

 LISTING ON OTC
EXCHANGE:-
 The OTC Exchange can list companies with issued capital
from Rs.30lakhs up to Rs.25crores.

The eligibility for listing are:-

 The issued size must be a minimum of Rs.20 lakhs or 25% of

the paid up capital, whichever is higher.

 Companies engaged in hire purchase/ finance/ leasing,

amusement parks, etc. shall not be eligible for listing on the
OTC exchange.
 ADVANTAGES:-

 For the investors:-

Quick settlements and definite liquidity is ensured to
investors.
Market makers ensure price stability, liquidity and
depth of the market.

 For the Company:-

The cost of public issue is low.
The company gets high visibility at national level.
 RECENT TRENDS:-
 Finance and leasing companies were allowed to get listed on
OTCBI.

 The minimum post issue capital to be offered to the public to

enable listing was lowered from 40 per cent to 25 per cent.
 NATIONAL STOCK
EXCHANGE OF INDIA:-

 The high-powered committee on the establishment of new

stock exchanges headed by M. J. Pherwani.

 The National Stock Exchange of India was incorporated in

November1992 and promoted by IDBI, ICICI, LIC, GIC and
its subsidiaries, State Bank of India and SBI capital Markets
Limited.
 OBJECTIVES:-

 To establish nation wide trading facilities for equities, debts

and hybrids.

 To facilitate equal access to investors across the country.

 To provide fairness, efficiency and transparency to the

securities trading.

 To meet international securities market standard.

 FEATURES:-
 The NSE employs a fully automated screen based trading
system.

 Investors can trade 400 cities on a real time basis.

 The automated trade matching system secures the best price

available in the market to the investor.

 The trading member can transact a high volume of business

efficiently
 NSE AND WHOLESALE DEBT
MARKET (WDM):-

 The only trading mechanism available in debt market was the

telephone market.

 NSE provided for the first time in the country, an online,

automated trading facility across a wide range of debt
instruments
 COMPARISON BETWEEN STOCK EXCHANGE,
OTCEI AND NSE:-

Stock Exchange OTCEI NSE

1. Membership Individuals, Firms and Corporate only Individuals, Firms and

Corporate Corporates

2. Method of trading Floor Screen based Screen based Screen based

3. System of trading Quote-driven Manual Code driven Computers Order driven Computers
linked to central OTCEI linked by satellite through
through telephone lines VSAT
4. Settlement T+2 T + 2 rolling settlement Same day to T + 2 in
WDM Standard Delivery
in Equity market
5. Transparency Nil Ensured Total transparency

6. Intermediary Jobber needed Not needed Not needed

 National Stock Exchange proposed system of
Public Issue Offerings (PIO):-

 The current process of initial offering is a lengthy one

involving considerable time and costs.

 NSE PIO facility would operate through a fully automated

screen based system.

 The system can also be used for issues which have

various combinations or components of book building and
fixed price issues..
 OBJECTIVES:-

 To provide facility to the issuer for on-line issue of securities.

 To provide wide retail distribution network.

 To reduce the cost of issue of securities.

 To reduce delay in listing of securities.

 TIME BOUND PIO SYSTEM:-
 This system can be used for price/rate discovery in case of
book building as well as for collecting subscription for fixed
price

 Issue will announce certain number of securities in case of

fixed price offerings and the total amount to be raised in case
of book building.
 INTERNET BROKING:-

 NSE launched internet trading in early February 2000.

 It is the first exchange in the country to provide web-based

access to investors to trade directly on the exchange.

 The investors get confirmation about them on their PCs

through the same internet route.
 WIRELESS APPLICATION PROTOCOL (WAP):-

 SEBI has approved trading through wireless medium on WAP

platform.

 WAP is introduced in November 2000.

 This serves as primarily retail investors who are mobile and

want to trade from any place when the market prices for
stocks at their choice are attractive.
 NATIONAL SECURITIES
CLEARING CORPORATION:-

 NSC has set up a wholly owned subsidiary – national

securities clearing corporation that takes up the responsibility
of settlement by opening guarantee.

 There is seamless integration of trading and settlement with

full guarantee which protects the interest of investors fully.