Distinguish between National Stock Exchange of India (NSE)
and Over the Counter Exchange of India (OTCET) on the
following bases :
Year of establishment
Paid up capital
Securities traded
Objective
Answers
Answer:
HomeFinanceDifference between regular stock exchange and OTCEI
Difference between regular stock exchange and OTCEI
Table of Contents [show]
Difference between Conventional (Regular) Stock Exchanges and OTCEI:
OTCEI vs Regular Stock exchange
The following are some of the difference between a conventional stock exchange or otherwise a regular stock exchange and Over the counter exchange of India (OTCEI).
1. Trading Activities:
Trading is done on Floor in conventional stock exchange, whereas in OTCEI, the trading is done through network or computer system.
2. Minimum paid up capital:
For listing of companies, minimum paid up capital is Rs. 5 crores. But the minimum paid up capital in case of OTCEI is 2 Crores only.
3. Membership restrictions:
Membership is restricted to region or location in a regular stock exchange, whereas the membership in OTCEI is spread throughout the country.
4. Securities traded:
In a conventional stock exchange securities belonging to that region and other permitted securities are traded. But in OTCEI, securities of all companies throughout India are traded.
5. Need for market maker:
Need for a market maker depends upon the exchange in a regular stock exchange. But market maker is a must for securities of each company in OTCEI.
6. Settlement days:
Settlement of Transactions are done on the basis of T+5 days in regular stock exchange. But in OTCEI, settlements are done as per its rules.
7. Primary Objective:
The primary objective of conventional stock exchange is being the improvement of Capital Market. But Primary objective of OTCEI is to help small companies to raise funds.
The over-the-counter exchange of India (OTCEI) is an electronic stock exchange based in India that consists of small- and medium-sized firms aiming to gain access to the capital markets like electronic exchanges in the U.S. such as the Nasdaq. There is no central place of exchange, and all trading occurs through electronic networks. The Over-the-Counter Exchange of India, or OTCEI, is an Indian electronic stock exchange comprised of small and mid-cap companies seeking to gain access to capital markets in other countries. Over-the-counter markets around the world are stock markets that function outside of formal exchanges. In the United States, OTC is also a reference to debt securities and other financial instruments that trade over a dealer network. 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.
NSE or National Stock Exchange is located in Mumbai, and it is India’s leading stock exchange market. It first came into existence in 1992 and brought with it an electronic exchange system in India, which led to the removal of the paper based system. NSE introduced Nifty 50 in 1996 as the identifying base for top 50 stock index, and it is extensively utilized as Indian capital markets’ barometer and by Indian investors. National Stock Exchange became a stock exchange recognized company by 1993, and in 1992, it was incorporated as a tax paying company under Securities Contracts Act, 1956. Formation of NSDL (National Securities Depository Limited) took place in 1995 to offer investors a safe platform for transferring and holding their bonds and shares electronically. National Stock Exchange is the 10th biggest stock exchange marketplace, and as of March 2017, its market capitalization reached over $1.41 trillion.