Understand the macro-economic parameters of

Indian Economy - Role of the participants - role

of various Regulators. Types of various
Corporate Actions.

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 Market Structure and Participants
• Market Infrastructure Institutions : Stock
Exchanges, Clearing Corporations and
Depositories
• Investors – Individuals and Institutions who buy
and sell securities
• Issuers – Companies that issue securities
• Financial Intermediaries – who facilitate
secondary market activity
• Regulator – Authority who oversees activities of
all participants in the market 2
Role of Participants in Financial
Markets
Stock Exchanges

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 Participants – Clearing
Corporations
• Function as counter parties for all trades executed on a stock
exchange.
• Details about Clearing Corporations in India
https://www.sebi.gov.in/clearing-corporations.html
• SEBI allows clearing corporations to invest in overnight funds
https://economictimes.indiatimes.com/markets/stocks/news/se
bi-allows-clearing-corporations-to-invest-in-overnight-funds/arti
cleshow/72282121.cms

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 Participants - Depositories

National Securities Depository Ltd (NSDL) and

Central Depository Services Ltd (CDSL)

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 Role of Participants in Financial
Markets
Custodians – Institutional intermediaries,
authorised to hold funds and securities on
behalf of large institutional investors (Banks,
Insurance Companies, MFs, FPIs)

19 Custodians are present

https://www.sebi.gov.in/sebiweb/other/OtherA
ction.do?doRecognisedFpi=yes&intmId=27
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Market Information

• Market Capitalisation
• Market Turnover
• Market Indices

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 Risk Management in Secondary
Market
• Capital Adequacy Norms: Base Minimum
Capital and Additional or Optional Capital.

• In 2013, capital market regulator Securities and Exchange

Board of India (Sebi) has increased the base minimum capital
(BMC) deposit for stock brokers to up to Rs 50 lakh, from a
maximum of Rs 10 lakh earlier, especially the ones dealing
with algorithmic trading (algo), in order to mitigate risks in the
market.

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 Margins

Minimum of 17%

Details of Margins for Equities

https://www1.nseindia.com/products/content/equities/equities/margins.htm

Details of Margins for Derivatives

https://www1.nseindia.com/products/content/derivatives/equities/margins.htm

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 Circuit Breakers and Price Bands

https://www1.nseindia.com/products/content/equities/equities/
circuit_breakers.htm
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 Price Bands
Price Band Hitters :
https://www1.nseindia.com/products/
content/equities/equities/
price_band_hitters.htm

•Daily price bands on 2%, 5% or 10% either way

•No price band for Derivative Products.

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 Corporate Actions
• Rights Issue
• Bonus Issue
• Dividend
• Stock Split
• Share Buyback
• Delisting of Shares
• Mergers and Acquisitions

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