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Stock Market

How do stock markets operate?

Stock exchanges are like market places where stockbrokers buy and sell securities for individuals or institutions. As per the SCRA (Securities Contracts Regulation Act) 1956, the definition of securities includes shares, bonds, scrips, stocks, debentures, government securities, derivatives of securities, units of collective investment scheme (CIS) etc.

The securities market has two interdependent segments: the primary and secondary market. The primary market is the channel for creation of new securities issued by public limited companies or by government agencies. New securities issued in the primary market are traded in the secondary market. The secondary market operates through the over-the-counter (OTC) market and the exchange-trade market.

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