Page 47 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Security Analysis and Portfolio Management

Notes For Investor

Investment in stocks will become easier. OTC Exchange's wide network will bring the stock
exchanges to every street corner. It will provide greater confidence and fidelity of trade. The
investor can look up the prices displayed at the OTC counter. He knows he is trading scrips at the
right market price as there is a transparency of price. It will enable transactions to be completed
quickly. Investors can settle the deals across the counter. A money or scrip proceeds from the
deal will be settled in a matter of days if not earlier. It will provide definite liquidity to investors.
The market making system in OTC will have two-way prices and will be quoted regularly to
provide sufficient opportunity for investors to exist. Investors may get a greater sense of security
because all scrips have been researched and members have been willing to themselves invest in
these scrips. In the case of public issue/offer for sale, the allotment will be done in 26 days and
trading in 30 days. This will immensely benefit the investors.
For Financial Environment

OTC Exchange will help spread the stock exchange operation geographically and integrate
capital investment into a national forum. It will encourage closely-held companies to go public
and venture capital across the country to boost entrepreneurship.

1.3.11 Inter-connected Stock Exchange of India

Inter-connected Stock Exchange of India Limited (ISE), has been promoted by 15 regional stock
exchanges to provide trading linkage/connectivity to all the participating exchanges to widen
their market. Thus, ISE is a national level exchange providing trading, clearing, settlement, risk
management and surveillance support to the Inter-Connected Market System (ICMS). ISE aims
to address the needs of small companies and retail investors with the guiding principle of
optimising the infrastructure and harnessing the potential of regional markets to transform
these into a liquid and vibrant market through the use of technology and networking. The
participating exchanges in ISE have in all about 4,500 traders. In order to leverage its infrastructure
as also expand its nationwide reach, ISE has also appointed dealers across various cities other
than the participating exchange centres. These dealers are administratively supported through
strategically located regional offices at Delhi, Calcutta, Chennai and Nagpur. ISE, thus, expects
to emerge as a low cost national level exchange in the country for retail investors and small
intermediaries. ISE has also floated a wholly-owned subsidiary namely, ISE Securities and
Services Limited (ISS) to take membership of NSE and other premier exchanges, so that traders
and dealers of ISE can access other markets in addition to the local market and ISE. This will
provide the investors in smaller cities with a solution for cost-effective and efficient trading in
securities.
Core objectives of the Inter-connected Stock Exchange include creation of single integrated
national level solution with access to multiple markets for providing high quality, low cost
services to millions of investors across the country, a liquid and vibrant national level market
for all listed companies in general and small capital companies in particular and providing
trading, clearing and settlement facilities to the traders and dealers across the country at their
doorstep with decentralised support system. Some of the features which make ISE a new age
stock exchange are as follows:
1. ISE is a national level recognised stock exchange having moderate listing fees and granting
listing and trading permission to small and medium sized companies having a post public
issue paid-up capital of 3 crore to 5 crore (subject to the appointment of market
makers), besides companies with a capital of above 5 crore.

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