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NISM Certifications · NISM-Series-XV: Research Analyst

Introduction to Securities Market for NISM Research Analyst

The Introduction to Securities Market chapter of NISM-Series-XV covers who operates in the market, how securities are issued and traded, which instruments exist, and how SEBI regulates it all. To score, learn the definitions, participant roles and process steps precisely, then practise MCQs on the look-alike options.

What this chapter covers

This chapter is the base layer of the Research Analyst paper. It explains the structure of India's securities market: the participants, the primary market where securities are first issued, the secondary market where they trade, the instruments themselves, and the regulator that governs them.

You will meet terms such as issuer, investor, intermediary, exchange, depository, clearing corporation, IPO, FPO, rights issue, settlement and SEBI. Most questions test whether you know what each term means and which entity does what.

Later chapters build on this vocabulary. Terminology in Equity and Debt Markets, Corporate Actions, Valuation Principles and Legal and Regulatory Environment all assume you already know how securities are issued, traded and regulated. Learn this chapter well and those chapters become easier to read.

This chapter carries a small share of the paper's marks (2 in the published chapter weightage), so it will not decide your result alone. But the questions are factual and can be answered reliably with a short, focused effort. The paper has negative marking of 25% of the marks assigned to a question, so each careless wrong answer costs you. Getting these definition-based questions right gives you safe marks, and the vocabulary also helps you in the heavier chapters such as Legal and Regulatory Environment.

Introduction to Securities Market: topics in the order to study them

  1. 1Securities Market Overview and ParticipantsStart here because it gives you the vocabulary and the map of who does what.
  2. 2Types of Securities and Financial InstrumentsNext, know what is being issued and traded, so the market processes make sense.
  3. 3Primary Market and Public IssuesNow see how those securities are first created and sold to investors.
  4. 4Secondary Market, Trading and SettlementThen learn how they trade afterwards, and how trades are cleared and settled.
  5. 5Regulatory Framework: SEBI and Market RegulationsFinish with the regulator, since its rules tie together everything you have just studied.

How to prepare Introduction to Securities Market

Keep this chapter short and active. It is mostly definitions and roles, so recall practice works better than rereading.

  1. Read the participants topic once and write a one-line role for each: issuer, investor, broker, exchange, depository, clearing corporation, regulator.
  2. List the main instrument types (equity, preference shares, debt, derivatives, mutual fund units) and note one defining feature of each.
  3. For primary market, write the flow of a public issue in order, and note how IPO, FPO and rights issue differ.
  4. For secondary market, trace one trade from order to settlement. Note which entity handles each step.
  5. Make a short list of SEBI's roles and the market rules you must know exactly as the workbook states them. Do not rely on memory of numbers; check them against the workbook.
  6. Do topic-wise MCQs, then a mixed set. For every miss, write why the correct option is right and why the trap option is wrong.
  7. Revise your notes the day before and again just before the test.

Common mistakes in Introduction to Securities Market

  • Mixing up primary and secondary market activities

    Fix: Ask one question: is the money going to the issuer (primary) or to another investor (secondary)?

  • Confusing the roles of exchange, clearing corporation and depository

    Fix: Link each to one verb: exchange matches trades, clearing corporation settles and guarantees, depository holds securities.

  • Treating IPO, FPO and rights issue as the same thing

    Fix: Note who the issuer is and who is offered the shares in each case, and write the difference in one line.

  • Guessing numbers, limits or timelines from memory

    Fix: Check every figure against the NISM workbook. If you cannot recall it, mark it for revision rather than guess.

  • Skipping this chapter because it carries few marks

    Fix: Spend a short, fixed block on it. The vocabulary helps in other chapters and the marks are easy to secure.

Last-day revision: Introduction to Securities Market

  • Primary market is where securities are issued for the first time; secondary market is where existing securities are traded.
  • An IPO is a first public offer by an unlisted company; a rights issue is offered to existing shareholders.
  • Exchanges provide the trading platform; clearing corporations guarantee and manage settlement of trades.
  • Depositories hold securities in electronic form; depository participants are their agents for investors.
  • Brokers execute trades for clients and must be registered with SEBI.
  • Equity represents ownership; debt represents a borrowing that carries a promise of interest and repayment.
  • Derivatives derive their value from an underlying asset such as a share, index or commodity.
  • SEBI was set up to protect investors, develop the securities market and regulate it.
  • Mutual fund units represent a share in a pooled portfolio managed by a professional fund manager.
  • Read each option fully: many wrong options differ from the right one by a single word.
  • Skip a question if you are unsure between two options; wrong answers carry a 25% negative mark.

Introduction to Securities Market practice questions

Introduction to Securities Market in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Introduction to Securities Market: frequently asked questions

How many marks does Introduction to Securities Market carry in NISM-Series-XV?

The published chapter weightage is 2 marks out of 100. It is small, but the questions are factual and usually straightforward to answer if you have learned the definitions.

Is this chapter difficult?

No. It is mostly definitions, roles and process steps, with no calculations. The main difficulty is telling similar terms apart, so practise MCQs with close options.

How long should I spend on this chapter?

Keep it short compared with heavier chapters such as Technical Analysis or Valuation Principles. One focused study session plus a round of practice questions is a sensible starting point, and you can adjust after your mock results.

Should I attempt a question if I am unsure?

The paper has negative marking of 25% of the marks assigned to a question. Attempt when you can remove at least one or two options with confidence, and leave a pure guess for the end.