The document discusses the differences between an over-the-counter (OTC) exchange and a stock exchange. An OTC exchange provides small and medium companies a low-cost way to access public funds, while a stock exchange facilitates trading of stocks, bonds, and other securities through a regulated market. Key differences are that OTC markets have no central regulator while stock exchanges are regulated markets with less potential for price manipulation.
3. What is Over the counter exchange of
India
(OTC) ????
OTCEL is an electronic stock exchange with the
object of providing an opportunity to small
&medium companies to assess public funds at a
low cost.
4. Why was it set up?????
It was set up to access high-technology
enterprising promoters in raising finance
for new product development in a cost
effective manner and to provide transparent
and efficient trading system to the
investors.
5. Objectives of OTC
The objectives of the OTC are
-liquidity
-fixed
-fair price
-simplified process of buying and selling
-quick disposal of orders
-cheaper method of public sale of new issues
6. Benefits for company of OTC
OTCEI offers facilities to the company having a
issued equity capital of more than Rs.30 lakhs
Small & medium closely held company can go
public
Encourage entrepreneurship
Company can get the money before the issue in
cases of bought out deals
Easy issue marketing by using the nation-wide
OTCEI dealers network
Nation wide trading by listing at just 1 exchange
7. Benefits for investors
Easily accessible by any investor
Provide greater confidence to investors because
of the complete transparency in India
Transactions are fast and completed quickly
Ensures security, liquidity, by offering 2 way
quotes,
OTCEI is an investors friendly exchange with
single window clearance for all investor requests.
8. What is Stock exchange ????
A stock exchange is an entity that provides services
for stock brokers and traders to trade stocks, bonds,
and other securities. Stock exchanges also provide
facilities for issue and redemption of securities and
other financial instruments, and capital events
including the payment of income and dividends.
Securities traded on a stock exchange include shares
issued by companies, unit trusts, derivatives, pooled
investment products and bonds.
9.
10. History of Stock Exchange
In 1609, investors led by one Isaac Le Maire formed history's first bear
syndicate.
The Dutch West India Company was formed in 1621, bringing a new
issuer to the burgeoning securities market.
On February 8, 1971, NASDAQ, the world's first electronic stock
exchange, started its operations.
A bond issued by the Dutch East India Company, dating from 7
November 1623, for the amount of 2,400 florins.
11. Facts about the Stock Exchange
The Code of Hammurabi recorded interest-bearing loans.
In 1609, investors led by one Isaac Le Maire formed history's first bear
syndicate.
The Dutch West India Company was formed in 1621, bringing a new
issuer to the burgeoning securities market.
NASDAQ was the first electronic stock exchange.
By 1698, a broker named John Castaing, operating out of Jonathan's
Coffee House, was posting regular lists of stock and commodity prices.
Those lists mark the beginning of the London Stock Exchange.
On February 8, 1971, NASDAQ, the world's first electronic stock
exchange, started its operations.
12. The role of stock exchanges
Raising capital for businesses
Mobilizing savings for investment
Facilitating company growth
Profit sharing
Corporate governance
Creating investment opportunities for small investors
Government capital-raising for development projects
Barometer of the economy
Speculation
13. Major stock exchanges of the world
New York Stock Exchange, New York City
London Stock Exchange, the City of London
Tokyo Stock Exchange, Tokyo
Hong Kong Stock Exchange, Hong Kong
Bolsa de Madrid, Madrid
Bombay Stock Exchange, Mumbai
Toronto Stock Exchange, Toronto
Sao Paulo Stock Exchange, Sao Paulo
Australian Securities Exchange's Sydney exchange centre, Sydney
Frankfurt Stock Exchange, Frankfurt
Paris Stock Exchange, Paris
SWX Swiss Exchange, Zurich
Mexican Stock Exchange, Mexico City
14.
15. Difference between OTC &
Exchange
In exchange markets, there’s a regulator (exchange)
through which transactions are completed, while in
OTC markets there is no regulator.
Exchange markets have less chances of price
manipulation, while the many competing traders in
OTC markets can manipulate prices.
Exchange markets ensure transaction security, while
OTC markets are prone to fraud and dishonest
traders.
