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Friday, Aug 30, 2002

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OTCEI mulls various options for survival

Nilanjan Dey

KOLKATA, Aug. 29

THE Over The Counter Exchange of India (OTCEI) is finally coming to terms with what could be a reality for it: a consolidation with the National Stock Exchange (NSE) or some form of alignment with small stock exchanges.

A merger or a similar action is, of course, one of three eventualities that OTCEI is facing today; the other possibilities being complete revival package or full closure.

The exchange, according to Mr Praveen Mohnot, Managing Director, is viewing some of these possibilities in the context of the current thinking on consolidation of regional stock exchanges (RSEs). He, however, laid stress on the fact that the decision-makers could well choose from a lot of other options.

"There are no concrete proposals on merger. This should not be the end of the road for OTCEI," he said, adding that a lot would depend on the view taken by the Securities and Exchange Board of India on the matter. The market regulator has been lately speaking out on what it feels are the merits of consolidation of the regional bourses.

The exchange, meanwhile, is making a strong case in favour of continuity. OTCEI, it is pointed out, has always tried to leverage on its unique sales proposition — product differentiation. The exchange, right since its inception, has tried to offer a unique set-up for investors, issuers and intermediaries.

Small exchanges, Mr Mohnot agreed, had their own set of problems and had lately seen a lot of negative publicity because of their poor volumes. Some sections in the capital markets, which had questioned their efforts to survive in the context of `competition' from the BSE and the NSE, had also called for their centralisation.

OTCEI in the recent past had tried its hand at other areas to kindle market's interest - - activities that are not entirely unrelated to its core activity, including distribution of government securities.

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