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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market

In the Indian securities market, which of the following is a feature of the secondary market as distinct from the primary market?

In the secondary market, existing securities are traded between investors, and the issuer receives none of the sale proceeds. Fresh issuance, direct capital raising and offer documents such as a prospectus belong to the primary market, not the secondary market.

  1. ASecurities are sold by the issuer directly to investors for the first time
  2. BTrading takes place between investors and the issuer does not receive the sale proceedsCorrect
  3. CFunds raised go directly to the company's capital base
  4. DSecurities are issued only through a prospectus

Explanation

The secondary market is where existing securities are traded among investors on exchanges. The issuer does not receive the proceeds of such trades. The other options describe primary market features such as fresh issuance, capital raising and offer documents.

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