Different Financial Market Participants

Financial market is primarily bifurcated into primary & secondary and order driven & quote driven.

Lets understand all markets mentioned above.

Primary Market: It is the market in which private companies issues their shares for the first time when they want to raise money from public in the form of equity shares(IPO).

Secondary Market can be called as stock exchange as here all listed equity shares are traded between different parties , can be called as order driven market as there is price transparency, settlement is guaranteed because of clearing house, order execution is not guaranteed, standardized platform.

Quote Driven Market: is also called over the counter market, mostly famous for the trading of derivatives contracts such as (Forward ,Options ,Swaps) ,commodity and FX. Counter parties are known in certain cases, no price transparency , order execution guaranteed.

Financial market Participants:

• Client
• Exchange
• Custodian
• Broker
• Investment Banks
• Regulatory Bodies
• Clearing House
• Asset Management Companies (Hegde Fund , Mutual Fund)
• Depositories
• Retail Banks
• Fund Administrators

Will cover all different participants and their roles in financial services industry in subsequent articles.

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