Capital Market

Structure

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 Capital Market Structure
• Market (Primary and Secondary Market)
• Instruments (Shares, Bonds, Debentures)
• Intermediaries (Brokers , underwriters, Marchant banker, portfolio
manager)
• Regulator (SEBI)

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 Markets
• Primary : IPO, purchased directly from the company.
• Secondary : All ready purchased bonds, shares and debentures are traded,
BSE and NSE are secondary markets.

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 Instruments
• Shares : provide dividends, ownership, voting right
• Bonds : debt, provide interest, no ownership, no voting rights, for projects
etc
• Debentures : debt, higher rate of return, unsecured.

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 Intermediaries
Marchant Banker
• Between investor & Company
• Act as manager
• Advise/ consult
• From conception to project production.

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 Intermediaries
Underwriters
• Registered with SEBI
• Buy all unsubscribed securities
• Can be institutional/non-institutional
• Buy from Company , sell to market in IPO
• Take underwriting commission

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 Intermediaries
Portfolio Managers
• Advise/undertake investment on behalf of client
• Discretionary or non-discretionary
• Motilal Oswal, ICICI, Kotak PMS

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 Intermediaries
Stock Brokers
• Individual or firm
• Investor & exchange(secondary market)
• Trade on behalf of client/at their instructions
• All paperwork, advise investor
• Take brokerage
• All are registered with SEBI
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 The regulator - SEBI
• FMC also merged with SEBI
• Protect interest of investor
• Regulate exchange, audit, inspection
• License to exchange
• Prohibits unfair trade practices (insider trading)

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