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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

Meera Iyer wants to know which type of market is the one where companies first issue new shares to investors, so that the money raised goes directly to the issuing company. Which market is this?

This is the primary market. New securities are issued by the company to investors for the first time, so the money raised goes to the issuer. In the secondary market, investors trade already issued securities among themselves and the company receives nothing.

  1. APrimary marketCorrect
  2. BSecondary market
  3. CSpot market for existing shares
  4. DOver-the-counter resale market

Explanation

In the primary market, securities are issued for the first time and the proceeds flow to the issuer. In the secondary market, existing securities are traded between investors, and the issuer receives no money from those trades.

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