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CS Executive · Capital Market and Securities Laws · Secondary Market in India

A stock broker, Rahul, executes buy and sell orders for clients on the trading platform of a recognised stock exchange and is a member of that exchange. In the secondary market structure, what is Rahul's primary role?

Rahul acts as an intermediary who buys and sells securities on the exchange for clients. As a registered stock broker and exchange member, he executes client orders and earns brokerage, while regulation is by SEBI and electronic holding is by depositories.

  1. AHe is an intermediary who trades on the exchange on behalf of clientsCorrect
  2. BHe is the issuer who raises capital from the public
  3. CHe is the regulator who frames the rules for trading
  4. DHe is the depository holding clients' securities electronically

Explanation

A stock broker is a registered market intermediary and exchange member who transacts securities on behalf of clients for a commission. The issuer raises capital, SEBI regulates, and depositories hold dematerialised securities. Hence only option A describes Rahul.

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