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Players in the stock market

Updated: Nov 8, 2020

It's equally important to know about the key players in the stock market. In this article, we will learn about the key players in the stock market step by step.


Key Players in the Stock Market


1) Securities and Exchange Board of India (SEBI).

SEBI is the most important player in the stock market. You can tell that without the SEBI stock market will be a mess. SEBI is the head of the share market. It forms rules and regulations for the stock market.


Check out the detailed article on the function of the Securities and Exchange Board of India (SEBI).


2) Stock Exchanges

Stock Exchange is the broker between companies and you. You will shock to know that there is a 23 stock exchange market in India.


Check out the detailed article on the function of the Stock Exchange and also get to know the name of the 23 Stock Exchange.


3) Depositories

Depositories allow you to store the dematerialized share certificates of the stock you own in a dedicated account. Through dematerialization also, known as DEMAT accounts. It allows you to store all the share you own in an electronic format.


National Securities Depository Limited (NSDL) and Central Securities Depository Limited (CDSL) are the two depositories in India.


4) Depository Participants

Depository Participants is a registered agent who acts as an intermediary between the Investor and the Depository (NSDL & CDSL). You need to open Demat accounts through Depository Participants. All your transaction with Depositories (NSDL & CDSL) will be through Depository Participants.


5) Stockbrokers

It is another section of financial intermediaries and plays a major role in the stock market. Stockbrokers are registered with the stock exchange as trading members. They act as a link between the stock exchange and investors like you.


To buy and sell shares in the stock market, you need to open a trading account with a stockbroker of your choice.


It gives you access to the financial markets. A stockbroker charges a' fee' known as 'brokerage' for every buy or sell transaction that you make through their trading account.


6) Investors and Traders

Just like you, there are several other individuals as well as institutions that buy and sell shares there. Here's a quick glimpse of the different kinds of investors and traders involved.

  • Institutional investors:

There are corporate entities that invest in the stock market. Since they are financially powerful, they can influence the market movement. They're sub-classified into two categories

  1. Foreign Institutional Investors (FIIs)

  2. Domestic Institutional Investors (DIIs)

7) Domestic AMCs

Asset Management Companies are firms that pool funds from various clients and invest the capital raised in various financial market securities.


8) Retail

Individuals like you who invest in the stock market are known as retail investors. They're classified into three categories, which are as follows

  • Resident Indian

  • Non-Resident Indian (NRI)

  • An overseas citizen of India (OCI)

9) High Net-worth Individuals

Any individuals who raised capital more than Rs 2 crores and take part in the investing and trading activities in the stock market are known as High Net-worth Individuals.


10) Clearing Corporations

Assume you want to buy a share of XYZ Limited at Rs 100. To buy the share you need a seller who is selling the share of XYZ Limited at Rs 100, isn't it? Assuming that such a seller exists, the order you place to buy that 1 share gets executed.


Rs 100 get debited from your trading account. Simultaneously, the same Rs 100 gets credited to the account of the seller. Parallelly, that 1 share that you traded will be transferred from your seller's Demat account to your Demat account.


Essentially, a clearing corporation performs two basic functions:

  • They help prevent defaults by ensuring that buyers have the necessary funds to pay for their trades and that sellers are in possession of the assets they intend to sell.

  • They ensure that the funds and assets are transferred to the right accounts seamlessly.

India has two main clearing corporations, namely the National Security Clearing Corporation Limited (NSCCL), which is a subsidiary of the National Stock Exchange, and the Indian Clearing Corporation Limited (ICCL), which is a subsidiary of the Bombay Stock Exchange.


11) Banks

The role of banks in the stock market is quite clear-cut. They help ensure that you have the funds needed for carrying out your trades. The funds in your bank account are transferred to your trading account, so you can buy financial assets without any hassle. To ensure that you have a smooth and seamless trading experience, you must link your Demat account, your trading account, and your bank account.

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