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Top 14 Key Participants of the Capital Market

Top 14 Key Participants of the Capital Market-TaxIndiaClub

Many times, we think about who the participants of the Capital Market are. here, we give you the List of Top 14 Key Participants of the Capital Market. also Discuss the Meaning of Each Participant of the capital market.

What is A Capital Market?

Before going onwards, we learn What is A Capital Market? and the Role of the Capital Market in the Country.

The capital Market is the Symbol of the Economic Growth of any Country. Because through Capital Market Saving of the people is effectively used for the Long-Term Investment. When the Capital Market is well developed then it is useful for the both Investor as well as Corporate Sector.

It is use for evaluating the Economic Health of any Country. it can be said that Strong Capital Market , Stronger the Economy.

Capital Markets are Financial Markets for the Buying and Selling of Long-Term Debt or Equity-Backed Securities.

The primary role of the capital market is to raise long-term funds for governments, banks, and corporations while providing a platform for the trading of securities.

14 Key Participants of the Capital Market

Now we look at the list of key players of the Capital Market. here is the below mention list of the Top 14 Key Participants of the Capital Market.

  1. SEBI ( Regulator)
  2. Stock Exchange
  3. Clearing Corporation or Clearing House
  4. Depositories and Depository  Participants
  5. Custodians
  6. Stock-Brokers  and their Sub-Brokers
  7. Mutual Funds
  8. Merchant Bankers
  9. Credit Rating Agencies
  10. Financial Institutions
  11. Foreign Institutional Investors
  12. Non-Banking Institutions
  13. Issuer/Registrar and Transfer Agents
  14. Investors

SEBI ( Regulator): SEBI stands for Securities & Exchange Board of India. SEBI is the regulatory authority of the Capital and Securities Market.

The main objective of SEBI is to protect the interests of investors in securities. also, to promote the development and regulate the securities market.

Stock Exchange: Stock Exchanges is a Place where the Securities are Traded. Securities include Shares, Debentures, Bonds, Government Securities, and Mutual Funds Units.

There are two Leading Stock Exchange in India.

  • Bombay Stock Exchange Limited (BSE)
  • National Stock Exchange (NSE)

If you want to more about Stock Market Check this article:Stock Exchanges क्या है? -How many Leading Stock Exchanges in India?

Clearing Corporation or Clearing House: Clearinghouse is an exchange-associated body charged with the function of ensuring (guaranteeing) the financial integrity of each trade. Orders are cleared by means of the clearinghouse acting as the buyer to all sellers and the seller to all buyers.

Clearinghouses provide a range of services related to the guarantee of contracts, clearance and settlement of trades, and management of risk for their members and associated exchanges.

Depositories and Depository  Participants: Depository Services is an organization where the securities of a shareholder are held in the form of electronic accounts, in the same way as a bank holds money. The depository also provides services related to various transactions in such securities.

In India, there are two depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Check other Blog: How many depositories are there in India? How Depository Services Works.

Custodians/Clearing Members: Clearinghouse takes trading information from the exchange and passes the trade details to custodians/clearing members. Custodians confirm the obligations of the parties by netting.

Stock-Brokers and their Sub-Brokers: Stock Broker is the person who acts on behalf of a Trading Member and helps in dealing with securities such as Shares, Bonds, Debenture, and so on. Sub-Broker is the intermediately between the Stock Broker and Client.

Merchant Bankers: The person who entered into the business of issue management and dealt with buying, selling of the Securities. also, give Consultancy services to the member.

Read More:What is Investment Bank? – Main Function of an Investment Bank.

Credit Rating Agencies: Agencies that allot the Credit Rating based on the ability to make payment and their Credit score. CRISIL is the best Credit Rating Agencies that give Credit Rating. it wholly depends on the financial Creditability of the person.

Also Check:What is Credit Rating | How to decide Good Credit Rating.

Financial Institutions: Financial Institutionsis engaged  in the Financial transaction Business such as deposit of cash, Loan and Investment. it can act as Bank, Brokerage Firm, and Insurance Company.

Foreign Institutional Investors: Foreign Institutional Investors is Investor, who invests outside the Country. it includes the Insurance Company, Investment Company, Mutual Fund, and Hedge Funds.

Non-Banking Institutions: it is the Institution but they don’t have a full license of Banking.  Non-Banking Institutions mainly engage in the business loan and Advances, Purchase of share and bonds issued by the government.

Issuer/Registrar and Transfer Agents: Issuer is the organization having the purpose of generating funds by selling securities.

Investors: Investors are the lifeline of any capital market. A vibrant capital market should be capable enough to attract the savings of investors. Investors belong to various categories such as Retail Investors, Institutional Investors like mutual funds, insurance companies, and Foreign Portfolio Investors.

Intermediaries: Intermediaries are those entities that offer various services in relation to the capital markets. There are various categories of intermediaries such as stockbrokers, merchant bankers, underwriters, etc.

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