OTCEI: Benefits to Financial System

Benefits to Financial System

The OTCEI's role has been laudable in as far as it helps contribute improving the financial system of India in the following ways:

1. National network of OTCEI operations facilitates the integration of capital market in the country.

2.  Boon to closely-held companies as they are encouraged to go public because scrip‘scanbe listed even if only 40 percent of capital (now a minimum of 20 percent in case of closely held and new companies) is offered for public trading.

3.  Facilities wider dispersal of economic activities by encouraging small companies and small investors.

4. Promoting savings and investments by offering easier avenues for raising capital.

5. Providing over-all stimulation to venture capital activities thereby promoting entrepreneurship.

6. Market-making assistance by the sponsors on the OTCEI that helps in making appraised future projections in the issue documents which in turn helps prospective investors in determining the usefulness of the issues for investment purposes, promoting investment environment in general.

7.  Those members of the OTCEI who did not have multiple memberships can now have an opportunity to trade in some of the large capital index stocks.

8. Encourage venture capital activities and boost entrepreneurship

9. Spread of stock exchange operations geographically all over India