Secondary Market by Prajwal Loni

A secondary market is a market where investors purchase securities or
assets from other investors, rather than from issuing companies themselves.
In Simple words,
It is a market where investors buy & sell securities of Existing
companies.
 Listing of Securities means The admission of Securities of a
Company to Trading in a Stock Exchange.
 Listing is not Compulsory under the Companies Act.
 It becomes necessary when a company desires to issue share or

debentures to the public .
PRESENTED BY,
 To Provide liquidity to Securities
 To Provide dealings in Securities
 To Mobilize savings for economic development
 To Provide free negotiability to stocks
 To Protect interests of Shareholders & the investors
 Provides Liquidity to Securities
 Regular Information
 Easy Transferability
 Income Tax benefit
 Transparency in dealing
 Helps the company to gain National importance and
Widespread recognition
 Helps in raising Additional capital
 No gurantee about Safety to investors
 Listed companies suffers when share prices go down
 Disclosure of information by listed companies
 Listed companies may collect huge capital but may not use it
properly.
 The Promoters should first decide on the Stock Exchanges where they want
the shares to be listed.
 They should contact the authorities to the respective stock exchanges where
they proposed to list.
 They should discuss with the stock exchange authorities the requirements and
eligibility for listing.
 The proposed MOA, AOA and Prospectus should be submitted for necessary
examination to the stock exchange authorities.
 The company then finalizes the Memorandum, Articles & Prospectus.
 Securities are issued and alloted.
 The company enters into a listing agreement by paying the prescribed fees
and submitting the necessary documents and particulars.
 Shares are then and are available to trading.
The Requirement of Documents of all Stock Exchanges are now Uniform and
these are to be satisfied before listing could be done.
 Memorandum & Articles of Association .

 Copies of all Prospectus.
 Details of Capital Structure.
 Copies of Financial Statements, Audited Accounts for the last 5yrs.
 Letter of Consent from SEBI.
 Details of shares & debentures issued and share forfeited.
 Details Bonus issues and Dividends decleared .
 Details of Company since Incorporation.
 Agreement with and Financial Institutions if any;
An Investor is any person or other entity ( such as a firm or MF ) who commits
capital with the expectations of receiving financial returns. Investors use
different financial instruments to earn a rate of return to accomplish financial
goals and objectives.
There is no such age restrictions

for investing in the Stock Markets
in India. But, you should be more
than 18 years old to create a Demat
Account and a trading account.
An account can be opened in a
Minor’s name by the Parents or the
appointed guardian after submitting
their respective documents.
Speculation is the purchase of an assets with the hope that it will become
more valuable in the Future.
Speculators are sophisticated
investors or traders who purchases
shares or securities for short periods
of time and employ strategies in
order to earn profit from changes in
its price.
They bring liquidity and assume
market Risk.
In Simple words, a person who guesses

or suggests that the price of the
securities will go up or down.
 BULL
 BEAR
 STAG
 LAME DUCK
Bulls are the optimistic speculators. They enter the market, expecting the
security price to Rise so they Buy now to sell them at a profit in the future. If
their expectations become reality the benefit from the price difference and exit
the position .
In simple words, Bulls is a speculators who expects Rise in price of the

securities in future to earn Profit.
Bears are the counter part optimistic speculators. A Bear speculator
pessimistic and expects a Sharp Fall in the Prices of a traded security.
Here the speculators enters the trade by short selling the securities at a
higher price to secure profits against the expected price drop.
In simple words, Bears

are the speculators who
expects fall in price of
the securities to earn
profit in future.
A Stag Speculator is generally
cautious, especially compared to
bulls or bears. Usually , they focus
more on applying for new issue of
shares of new companies. Then,
when the stock take off, they sell
them at a profit.
In simple words, he is a Speculator

who subscribes to a new issue,
expecting the price of the stock to
rise immediately upon the start of
trading .
Lame Duck are the speculators or
traders who are unable to fulfill
their commitments and are suffering
from massive financial losses have
to waddle away from the market
and not able to deliver the securities
on fixed date.
In simple words, are the speculators

who are unable to recover their
trading losses .
A Market maker is an individual
participant or member firm of an
exchange that buys and sells securities
for its own account.
Market makers not allowed to deal
with the public directly. He deals with
brokers who are engaged with the
investors. Thus, the securities is bought
by the jobber from members and sells
to members who are operating on the
stock exchange as a broker.
Market makers creates market for
investors to buy & sell securities.
Market makers typically large banks or
Examples : financial institutions.
• ARIHANT CAPITAL MARKETS LIMITED
• GOLDMINE STOCKS PRIVATE LIMITED
A stock broker is a financial market representatives who operates in
securities. Their primary job role obtainment of purchase and sale
orders of securities and execution of the same for brokerage. The
Investors relay on their expertise and knowledge regarding market
dynamics to invest in stocks and other investment options.
In simple words, A stockbroker is a financial professional who

executes orders in the stock market on behalf of clients for a fee or
commission
Stock Broker
Discount No advice
Full-service
Service Stockbroker
Stockbroker
Stockbroker
Full-Service Stockbroker :
Full-service brokers offer customized support and
interaction in facilitating trades, managing portfolios, financial planning, and wealth
management services for clients.
Clients are assigned to individual stockbrokers or financial advisors.
Discount Service Stockbroker :

A discount broker is a stockbroker who carries out buy and
sell orders with little or no commissions. Discount brokers do not provide the
investment advice or guidance provided by a full-service broker.
No Advice Stockbroker :
This set of Stockbrokers or Reg. representatives
does not offer any additional services as provided by the other two category of
Stockbrokers. They also don’t guide or recommend about what investments
clients should make. Instead, they act as a link between the purchase and sale
of securities on their client’s behalf.
Their Services are specially for active day traders, who can manage and
execute orders online at a minimum commission.
 Buying & selling of shares, stocks and other securities on behalf of investors
 Analyzing and interpreting financial reports.
 Providing investment strategies advisory services based on market

conditions.
 Recommending investors about potential investment opportunities.
 staying up to date with the stock market trends and news.
 Managing investor’s investment Portfolio.

 Any Individual, Firm or a corporate can become a broker of a
Stock Exchange.
 The minimum educational qualification required to become a

Stock broker is a graduation with at least 2 years of experience in a
Stock broking firm.
 The minimum age required for individuals and

partners/directors of firms is 21 years.
 For Corporates wanting a membership at the NSE market, a

minimum paid up equity capital of RS.30 lacs.
Selection of a Broker
Opening De-mat Account
Placing the Order
Execution of Order
Settlement
Contract Note

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A secondary market is a market where investors purchase securities or

 Listing is not Compulsory under the Companies Act.

 It becomes necessary when a company desires to issue share or

 Memorandum & Articles of Association .

There is no such age restrictions

In Simple words, a person who guesses

In simple words, Bulls is a speculators who expects Rise in price of the

In simple words, Bears

In simple words, he is a Speculator

In simple words, are the speculators

In simple words, A stockbroker is a financial professional who

Discount Service Stockbroker :

 Analyzing and interpreting financial reports.

 Providing investment strategies advisory services based on market

 Recommending investors about potential investment opportunities.

 staying up to date with the stock market trends and news.

 Managing investor’s investment Portfolio.

 The minimum educational qualification required to become a

 The minimum age required for individuals and

 For Corporates wanting a membership at the NSE market, a

Opening De-mat Account

Placing the Order

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