NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Introduction to Securities Markets
An investor buys a share at ₹200 on the NSE and sells it a few months later to another investor through the exchange. Who receives the sale proceeds?
The selling investor receives the proceeds. A trade on the exchange after the original issue is a secondary market transaction between investors, so the issuing company gets nothing from it. The company raised funds only at the time of the original issue.
- AThe company that issued the share
- BSEBI, as the market regulator
- CThe selling investorCorrect
- DThe stock exchange
Explanation
This is a secondary market transaction between two investors. The issuing company does not receive money from such trades; it only received funds when the share was first issued in the primary market.
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