It is the responsibility of clearing members to maintain sufficient balance to meet obligations. Every clearing member needs to maintain an account with a clearing bank. It also provides financial guarantee for all transactions executed on the exchange.ДЄ clearing bank acts as a link between clearing corporations and clearing members. For example, NSE Clearing Limited (NSE Clearing), a wholly owned subsidiary of NSE is responsible for clearing and settlement of all trades executed on NSE.ДЄ clearing corporation is responsible for clearing and settling all transactions including shares and funds executed in the stock market. Investors cannot directly trade on stock exchanges without brokers.Д¬learing members are those who help in clearing and settlement of trades through clearing houses.ДЄ clearing corporation / agency can be a part of an exchange or can be a separate entity. Investors need to open a trading account with a stock broker to invest in stock markets. Stock brokers can be associated with multiple stock exchanges to provide trading services to investors. Trading members can be individuals (sole proprietors), partnership firms, corporates and banks, who are permitted to become trading and clearing members of recognized stock exchanges, subject to fulfillment of eligibility criteria. This system of using the existing distribution channel (mainly constituting DPs) helps the depository reach a wide cross-section of investors spread across a large geographical area at a minimal cost.ДЄ trading member or a stock broker is a member of a stock exchange and can provide securities trading facilities to investors. As per SEBI regulations, DPs can be organizations involved in the business of providing financial services like banks, brokers, custodians and financial institutions. The market intermediary through whom depository services can be availed by investors is called a Depository Participant (DP). An investor wishing to utilize the services offered by a depository has to open an account with the depository through a Depository Participant. The depository concept is similar to the banking system with the exception that banks handle funds whereas a depository handles securities of investors. In India, there are two such organizations viz. In other words, a depository can therefore be conceived of as a вЂbankвЂ™ for securities. The organization responsible for maintaining investorsвЂ™ securities in electronic form is called the depository. Earlier, these transactions used to take place physically by meeting in person in the stock exchange through an вЂOpen CryвЂ™ system.Д«ut in todayвЂ™s time, trading takes place online through computers connected to the Internet. The stock exchanges provide a trading platform where buyers and sellers (investors) can transact electronically in securities.

Stock market learning pdf