OTCEI managing director Joseph Bosco told reporters in Calcutta on Saturday that under the contingency plan, the exchange would be able to ensure trading facilities to at least 330 members without any hitch.

In Mumbai alone, nearly 280 members would be able to trade either through dial-up telephone lines or by using the VSAT network. Out of the 280 members, 80 have dual memberships of NSE and OTCEI. In addition, OTCEI would offer 50 VSATs to members outside Mumbai who have paid their technology fees of Rs 2 lakh and belong to the top 50 in terms of turnover, Bosco revealed.

"One of the reasons for the failure of OTCEI to take off as a viable entity is the failure of DoT toupgrade their I-NET communication. This network gave less than 50 per cent up-time against international standard of 99.9 per cent. As a result, members faced connectivity problems. The money we spent as annual rentals to DoT was a total waste," Bosco pointed out.

Dwelling on steps being taken to improve market-making on the exchange, Bosco said market-making in the new system would be easier as the exchange would provide protection to market-makers by limiting their losses.

"This would be done by limiting their inventory at any given point of time to five per cent of the issued capital of a particular scrip. The market-maker's `buy' quote will disappear as the inventory reaches the limit. It will reappear only when it is drawn down to three per cent," he added.

Besides, to give them more flexibility the hybrid trading system proposed under the revival package will give market-makers priority in trade matching across the `quote-driven' and `order-driven' systems, Bosco explained.

Moreover, theintroduction of physical shares in the OTCEI environment will enable market-makers to access bank finance against their holdings. This will be achieved by discarding CR (counter receipt) as the trading document and introducing trading in physical shares.

The OTCEI managing director revealed that the revival package entails an investment of Rs 6 crore out of which NSE would provide equipment worth Rs 4 crore. The revival plan is expected to take off from September this year and envisages delinking the clearing and settlement functions from OTCEI, which will be handled by the NSE clearing house.

To encourage arbitrage business between the NSE and OTCEI, the weekly settlement cycle is also proposed to be changed from Thursday-Wednesday to Friday-Thursday, Bosco said.