Thursday, January 18, 2007

OTCEI likely to get equity infusion from foreign bourses

Following the interests shown in the NSE and the BSE by foreign investors, there is news that foreign stock exchanges are now eyeing equity stake in the Over the Counter Exchange of India (OTCEI). The government wants to position the OTCEI on the lines of London's Alternative Investment Market (AIM) by allowing easier corporate governance norms for the exchange, and is now planning to throw a lifeline to the now defunct bourse for small and medium companies.

Accordingly, the government is likely to encourage foreign stock exchanges to buy a strategic stake in the bourse. Recently, officials from the China Shanghai Stock Exchange visited the OTCEI and it is learnt that the Chinese may be willing to buy 5% in the exchange as permitted under current guidelines. It is also learnt that London's AIM and the South Korean Stock Exchange may be willing to buy stakes in the exchange. In addition to relaxing the listing norms on the OTCEI, the government is also likely to increase the eligibility criteria for companies coming out with IPOs.

The OTCEI was incorporated in early 1991, even before the establishment of the NSE in 1994. The forthcoming Budget is likely to name its exclusivity for listing by small and medium enterprises. The Securities and Exchange Board of India (SEBI) has also appointed a sub-committee to study the revival of the OTCEI.

Read more on this in the Business Standard article.

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