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Unit 2: Securities Market: An Overview

Notes
Sub-brokers (Cash Segment) 62,471 75,378 83,808
Foreign Institutional Investors 1,635 1,713 1,722
Portfolio Managers 232 243 267
Custodians 16 17 17
Registrars to an Issue & Share Transfer Agents 71 74 73
Merchant Bankers 134 164 192
Bankers to an Issue 51 48 55
Debenture Trustees 30 30 29
Underwriters 19 5 3
Venture Capital Funds 132 158 184
Foreign Venture Capital Investors 129 143 153
Mutual Funds 44 47 51
Collective Investment Schemes 1 1 1
* DCA, DEA, RBI & SEBI.

Source: SEBI Bulletin, February 2012
The securities market, thus, has essentially three categories of participants, namely the issuers of
securities, investors in securities and the intermediaries. The issuers and investors are the
consumers of services rendered by the intermediaries while the investors are consumers (they
subscribe for and trade in securities) of securities issued by issuers. In pursuit of providing a
product to meet the needs of each investor and issuer, the intermediaries churn out more and
more complicated products. They educate and guide them in their dealings and bring them
together. Those who receive funds in exchange for securities and those who receive securities in
exchange for funds often need the reassurance that it is safe to do so. This reassurance is provided
by the law and by custom, often enforced by the regulator. The regulator develops fair market
practices and regulates the conduct of issuers of securities and the intermediaries so as to protect
the interests of suppliers of funds. The regulator ensures a high standard of service from
intermediaries and supply of quality securities and non-manipulated demand for them in the
market.

Self Assessment

Fill in the blanks:
1. ...................................... of resources from those with idle resources to others who have a
productive need for them is perhaps most efficiently achieved through the securities
markets.
2. Securities markets provide channels for reallocation of savings to investments and
entrepreneurship and thereby ...................................... these two activities.
3. There are a set of economic units who demand securities in lieu of funds and others who
supply ...................................... for funds.
4. The amount of funds supplied by the ...................................... may not be the amount needed
by the ......................................

5. The risk, liquidity and maturity characteristics of the securities issued by the issuer may
not match ...................................... of the supplier.

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