Stock Exchange :

A stock exchange is a platform which provides services through stock brokers, to the investors/traders to buy/sell stocks, bonds and other securities. Trade on an exchange can be done only by its members, called stock brokers.

The stock exchanges are regulated by the capital market regulator (SEBI).

A stock exchange provides the following useful economic functions :

1. Help determining fair prices based on demand and supply forces and all available information

2. Provide easy marketability and liquidity for investors

3. Facilitate in capital allocations in primary markets through price signaling

4. Enable investors to adjust portfolios of securities

Depository – Depository is an institution or a kind of organization which holds securities with it in which trading is done like shares, debentures, derivatives, commodities etc. There are two depositories in India: a) National Securities Depository Limited (NSDL) b) Central Depository Services Limited (CDSL)

Depository Participant (DP) – A DP is an agent of the depository (NSDL/CDSL). It is an intermediary between the depository and the investor. A DP can offer depository related services only after obtaining a certificate of registration from SEBI.

De-mat accounts:

De-mat accounts are maintained in an electronic form. Dematerialization is the conversion of physical/ paper securities into the electronic form. The de-mat account is opened with a depository participant (e.g., a bank or a broker) who has an account with either Central Depository Services Limited (CDSL) or with National Securities Depository Limited (NSDL)

Stock brokers: These entities are members of stock exchange and are also required to be registered with the SEBI and be guided by the directives of SEBI. Stock brokers act as intermediaries between the buyer and the seller of stocks and other securities