The OTCEI is a company incorporated under the Companies Act 1956. It was set-up to provide small and medium companies an access to the capital market for raising finance in a cost-effective manner.
Advantages Of OTC Market
It provides a trading platform to smaller and less liquid companies as they are not eligible for listing on a regular exchange.
Family concerns and closely held companies can go public through OTC.
Dealers can operate both in new issues and secondary market at their option.
It gives greater freedom of choice to investors to choose stocks by dealers for market making in both primary and secondary markets.
It is a transparent system of trading with no problem of bad or short deliveries.
Information flows are free and more direct from market makers to customers since there is close contact between them.
