As part of the Dave Committee report in 1996, it was suggested that equity shares of unlisted companies should be allowed to be traded on OTCEI. In this context, the exchange has designed the trading rules and the market guidelines for the initiation of Trading in Unlisted Securities and the same has been submitted to SEBI for approval. This market is quite active and robust in the financial sector abroad (PORTAL market in the U.S.) and is expected to receive a positive response from investors in the Indian markets.

OTCEI proposes to introduce a vibrant and a well regulated market structure for trading in unlisted securities thereby giving an exit option for venture capital / Private equity, offshore funds and other institutions and corporates. This provides improved investment opportunities in start-up enterprises, especially in the growth sectors.

The Business Objectives

To promote organised trading in Unlisted Securities

To broadbase the existing informal market in order to make it more liquid

To provide a source of valuation for securities

To act as a launch pad to an IPO

Benefits to the Participants

Act as a benchmark to value securities

Creating an exit option for illiquid stocks / venture capitalists

Introducing transparency for trading in Unlisted Securities

Platform for issuers and first level investors (QPs) like financial institutions, State level Financial corporations, Foreign Institutional Investors to trade

System for defining benchmark for securities

Organising and broadbasing trading in the existing market

Shuffling portfolios for the investors

Increasing business for the market constituents

Easier launch pad for an IPO