The difference between stock exchange and OTC;

The difference between stock exchange and OTC;

The first difference between the stock market and OTC is that the OTC market does not have a specific physical location where traders gather like the stock market.
The second difference between the stock market and OTC is that the rules established in the OTC are flexible and usually come from the agreement of the parties, but there are certain standards and rules in the stock market.
The third difference between stock market and over-the-counter market is that the daily fluctuation limit of the over-the-counter market is one percent higher than that of the Tehran Stock Exchange.
That is, the daily fluctuation limit for stock market companies is 4% and for OTC companies is 5%.
The fourth difference between the stock market and OTC is that there are no benefits such as risk reduction and price transparency in OTC markets due to the fact that the terms of transactions are determined by the opinion of the parties.
The fifth difference between the stock market and OTC is that the working hours of the OTC are more flexible than those of the stock market.
The sixth difference between the stock market and OTC is that the OTC has five markets: first, second, third (supply), new financial instruments and base. But the stock market has two markets: first and second.
The seventh difference between stock exchange and OTC is that in OTC, the current level of electronic facilities enables 24-hour transactions, which is a major advantage compared to an exchange.
The eighth difference between the stock market and OTC is that there is a difference in the acceptance process in the stock and OTC markets.

In fact, the entry of companies into the capital market always indicates the growth of the company and their introduction in the country. Companies whose shares are traded in financial markets have a higher credit rating.

Therefore, entering the stock market is considered among the goals of companies. But the fact that quick and easy access to the securities market was not possible for a large number of active stock companies in the country and these companies were deprived of the benefits of the capital market was evident before the establishment of the OTC.

As a result, Iran’s over-the-counter exchange was established with a structure and legal status similar to the stock exchange, but with simpler acceptance and transaction conditions to expand the scope of the country’s capital market.

The most important task of Iran’s over-the-counter exchange is to organize and guide a part of the capital market that does not have the conditions to enter the stock exchange or has the desire to enter the market faster. Acceptance is such that the companies have the possibility to enter the market by meeting the minimum conditions and in the fastest possible time and use all the benefits of the companies accepted in the securities market.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Link to the audit accounting clinic
https://t.me/joinchat/BnzBsTuioTshiXBwf9bBPQ

This post is written by Mahdi_kohsoltani