Who are the key participants in the stock market?
The stock market is a vast ecosystem with different participants playing essential roles in its functioning.
These include investors, stock exchanges, regulators, brokers, and companies.
Investors – Investors are individuals or institutions that buy and sell stocks.
They can be retail investors (individuals trading for personal wealth creation) or institutional investors (mutual funds, hedge funds, insurance companies,etc) managing large sums of money.
- Stock Exchanges – Exchanges like the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India provide the platform where stocks are bought and sold. They ensure transparency and fair pricing by matching buy and sell orders in real-time.
- Regulators – The Securities and Exchange Board of India (SEBI) regulates the Indian stock market. It ensures that companies, brokers, and investors follow the rules, preventing fraud and market manipulation.
- Stockbrokers – Brokers act as intermediaries between investors and stock exchanges. They provide platforms such as Bullsmart through which investors can trade stocks. Brokers charge a fee or commission for executing trades.
- Companies (Issuers) – Publicly listed companies issue stocks to raise capital. When a company launches an Initial Public Offering (IPO), it allows investors to buy shares and become part-owners of the business.
Other participants include market makers, who provide liquidity by continuously buying and selling stocks and clearing corporations, which ensure smooth settlement of trades. Together, these participants keep the stock market running efficiently.
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