From are independent to one another Some of

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the time you access the market – let’s just say, to buy a stock till the time
the stocks comes and hits your DEMAT account, a bunch of corporate entities are
actively involved in making this work for you. These entities play their role
quietly behind the scene, always complying with the rules laid out by SEBI and
ensure an effortless and smooth experience for your transactions in the stock
market. These entities are generally referred to as the Financial

these financial intermediaries, interdependent of one another, create an
ecosystem in which the financial markets exists. This chapter will help you get
an overview of who these financial intermediaries are and the services they



Now let’s understand
the stock market intermediaries: Market intermediaries are the entities,
which help investors to invest in stock market and link investors to stock
exchanges and other required entities, these intermediaries are independent to
one another

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Some of the stock market Intermediaries is:

Stock Broker, Sub Brokers and
Depository Participants,


Clearing Corporations,

Banks, Debenture Trustees, Merchant Bankers,

Credit Rating Agency (CRA),

Portfolio Managers and Portfolio management System (PMS),

Asset Management Companies (AMC).



Stock Broker, Sub Brokers and
Depository Participants:


Stock Brokers: Stock brokers holds the broking license and these are corporate entity,
registered as trading members with the stock exchange, who helps investors to
open Trading and Demat account.

Sub Brokers: A sub brokers works like an agents to the stock

Depository Participants:
Investors can not directly interact
with depositories; depository participants are those who connect investors to depositories.



acts like a vault for the number of shares you purchased. Shares are maintained
electronically in Demat account.

 We have two depository entities in India.

NSDL: The National Securities
Depository Limited.

CDSL: Central Depository Services Limited


Clearing Corporations:

Clearing corporation are the
entities, which ensure guaranteed settlement of your transactions.

The two types of clearing
corporate entities in India are:

NSCCL: National Security Clearing Corporation

ICCL: Indian Clearing Corporation.

    Role: These entities identify the buyer and seller and match
the debit and credit process also ensures no defaults.


Banks, Debenture
Trustees, Merchant Bankers:


Banks play an important role in market ecosystem.
Banks transfers funds from your bank account to trading account. The money to
come in and go out of your trading account a given specified bank account has
been linked t your trading account. The
three financial intermediaries operate via three different
accounts while transacting that is your trading account to trade
transactions, your DEMAT account to store your securities and your Bank account
to pay in and pay out process.


Debenture Trustees:


Most of the banks in India, acts as a
trustee to corporate debenture. When companies are in need of loans to expand
the business they can issue debenture against which they promise to pay


Merchant Bankers:

Merchant Bankers helps company in IPO
process, or in the primary market.

Credit Rating Agency

If a corporate or government entity wants to avail loan to expand their
business the credit rating agencies checks the worthiness of these entities and
examine whether the entity is worthy of giving loan or not.


Portfolio management
System (PMS) and Portfolio Managers:

Portfolio management system works similar to mutual funds and here the
minimum investment is Rs.25, 00,000.

Portfolio Managers:

Portfolio managers are those who professionally handle portfolio
management scheme. While looking for a fund investing a portfolio manager is
one of the most important factors to be considered.


Asset Management
Companies (AMC):

These are the entities which offer mutual fund schemes. Asset management
companies pools the investors money and maintain it in one account, invest that
money in different deviations to generate wealth to investors.

Note: The Indian stock market is regulated by SEBI (The Security Exchange Board
Of India). Market participants and Market intermediaries must follow the
set of rules and regulations prescribed by SEBI.


Categories: Management


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