Difference between Conventional (Regular) Stock Exchanges and OTCEI:
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.