Page 46 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Unit 1: Introduction to Capital Market

After scrutiny and confirmation by the registrar, the TCRs which will be substituted by PCRs Notes
will be collected and delivered to the buyer. Copies will be distributed to the Counter, OTCEI
and Registrar.
The counter receipts are tradable and they contain all the information which appears in a share
certificate.

Customer Purchase (at Dealers Counter)

If the dealer is not a market maker, he can act as an agent/broker to procure the scrip to the
investor. The purchase will also have a PTI scan which shows the scrips traded by various
market makers. Against customer orders, he will make a deal with the market maker (over
phone or otherwise) charge commission and deliver a CR.

Customer Sales

When an investor comes to a customer to sell, he produces a CR to be delivered to the counter
along with Transfer Deed duly signed. Before that, he verifies the PTI scan and satisfies himself
that the rate is acceptable. The customer will accept CR and TD, verify the details and compare
TD with its own details and issue confirmation slips (SCS) in quadruplicate, which will contain
the required details. One copy each of SCS distributed to the investor, the counter, the OTCEI
and the custodian registrar.

Notes TDS and SCS will be sent to Registrars for updation who will confirm
back to the counter
The Registrar appointed by the company would be given power/authority to transfer the
shares not exceeding 0.5% of the company's capital per folio, to maintain a register of
members and to keep in custody the certificates of the company to be exchanged with CRs
when the investor requests. In case where the price exceeds 0.5% of the capital per folio,
the Registrar refers such transfer to the company, which in turn has to transfer the same
within a specified time.

The Benefits which OTC Exchange will Offer are:

For Companies
It will provide a method of raising funds through capital market instruments which are priced
fairly. In OTC, the company will be able to negotiate the issue price with the sponsors who will
market the issue.
It will help save unnecessary issue expenses on raising funds from capital markets. The method
of sponsor placing the scrips with members of OTC who will in turn off-load the scrips to the
public will obviate the need of a public issue. Therefore, almost all associated costs will be
eliminated. It will help achieve a greater degree of management stability. The OTC Exchange
will list scrips over 20% of the capital made available for public trading. It will provide greater
accessibility to a large pool of captive investor base, enhancing the fund's reign substantially.
ITC Exchange will create a nationwide network, where investors will be serviced who will for
captive investor base for companies.

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