Financial intermediaries
(How many depositories are there serving demat accounts in the country?)
At present, there are only two depositories serving demat accounts in the country. NSDL i.e. National Securities Depository Limited and CDSL i.e. Central Depository Services India Limited both have the same service and both work under Sebi rules.
Just like you go to Brucker for opening a share trading account, not NSE or BSE, you go to NSDL or CDSL for opening a demat account, not to any depository participant - DP. These dPS serve the strings of the depository's agentate to open your account and are more of a Sebi rule.
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What role does the bank play?
In the case of the stock market, the role of the bank is only so that you can transact your rupees from the bank with a trading account and from a trading account with a bank. For this, your name must be the same in both the place i.e. trading account and bank account.
So trading, bank and depository accounts are connected electronically so that you can make deals easily.
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NSCCL and ICCL
NSE i.e. NSCL Stock Exchange is subsidized by
NSCCL (National Security Clearing Corporation Limited) and BSE i.e. Bombay Stock Exchange. Their responsibility is to settle each exchange on the trade. If you have bought a share of Tata at the price of 100, then it means that someone will have sold this share to you at the price of 100 rupees. The job of the Clearing Corporation is to ensure that the shares come out of the seller's Demat Account and into the buyer's Demat Account and the rupees come. out of the purchaser's Bank and into the merchant's financial balance. So overall, the Clearing Corporation does this in any deal, such as:-
1. Identifying buyer and seller and adding money and share accounts to their accounts.
2. Making sure that the deal is done and that no party withdraws from the deal.
Well, it is not necessary for any
investor to know much detail about Clearing Corporation. He will never work directly with them. He just needs to know that a professional organization is doing this with all the rules and regulations.
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Small abstract
From spoiling one of your shares in the stock market to the arrival of that share in your demat account, corporate entities i.e. banks are working, so that this work is done correctly. These entities working behind the scenes make your deal possible according to SEBI law laws so that you do not have any problems. Known as financial intermediaries.
These intermediaries depend on each other's work and together create an ecosystem without which
financial markets are impossible to operate.
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Stock broker
The broker, which we also call the broker, is probably the most important intermediate in the stock market, without knowing about it, you will not do the job. It is a corporate entity that helps to trade in a share chain and has a license to stock stock. And these work under Sebi rules.
To enter the stock market, you need to open a trading account with a broker. You can pick the intermediary you like.
Once your trading account is opened with your broker, you can buy or sell shares through your trading account.
So suppose you have opened a trading account and you want to make a deal, how can you do it?
There are many ways to buy shares, but the easiest is through a trading terminal software. You have to surf log in on your computer or smart phone and you own share live Yani to see the amount of time and to do the card. To that end this is the most favored strategy.
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Depository and depository porticipant
When you buy a property, keep its papers handy so that you can prove your ownership when the time comes. So similarly when you buy shares, you have to keep the share certificate handy to prove your stake. Because all the information is written in it, how much part of that company you have.
Until 1996, the share certificate was of paper. But since then, share certificates began to be issued digitally. The process of transforming paper shares into digital is called dematerialization, which in short came to be called demat (demat).
After 1996, the need to keep these demat shares digitally arose and since then a demat account has become a must. Depository was created to facilitate Demat Account. Depository your demat account works to keep all your shares in digital form. You can also consider this as your digital vault.
The trading account opened with your broker and the demat account opened with the depository are interconnected. For example, if you want to buy shares of a Tata company, you will log in to your trading account, put your price and place a buy order and buy the shares. Come here and finish the trading account work. After this, the shares of the Tata company will automatically enter your demat account.
Similarly, while selling, you have to put the share price and order on the trading account and the shares will be automatically withdrawn from your demat account.
Part-2.......
What is the stock market?
The stock market is an electronic marketplace, where the seller and the buyer make a deal together.
For example, take Infosys's current situation. While writing this chapter, who will be the next successor in Infosys remains a big issue and many senior employees have recently resigned from the company. Because of this, the honor/reputation/value of the company is being affected. And because of this, the company's share fell from 3,500 to 3,000 rupees. Whenever there is news of a change in management, the share price of the company i.e. the share price/stock price is affected.
The mind has two traders-T1 and T2
T1's view on infisys-what causes the company's stock to go down and whether the company is given coffee or chosen to be elected a new CEO.
Further T1 deals with this news, then its infosis shares should be sold or its infosis shares should be sold.
But T2 is looking at this situation from a different wire and has a different perspective. According to him, the stock of Infosys has already shown a lot of reaction to the successor issue, now soon the company will get a new leader and after that after his arrival, the stock of the company will go up.
Further T2 is up in the deal with this news so his Infosys should be worse of Stoke.
So at the price of Rs 3,000, there will be a T1 seller or a seller and a buyer of T2 Infosys.
Now the two companies, T1 and T2, will direct the buy-out for their respective Stoke Brook and complete these deals for the Croke Stoke exchange.
The stock exchange will ensure that both orders are met and the deal is completed. This is the main or primary task of the stock market - to create a platform where buyers and sellers can deal with stocks.
The stock market is the place where market participants make deals in listed companies according to their own point of view. And the deal will only happen if the points of view of the partners are different. Buying and selling can occur in the market only by having different perspectives or perspectives.
