NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
Ms. Kavita Rao wants to buy shares of a listed company and sell them later on a stock exchange. Which entity in the Indian capital market acts as the primary market intermediary that markets a company's fresh issue of shares to the public and is appointed by the issuer to manage the offer?
The merchant banker, acting as book running lead manager, is appointed by the issuer to manage and market a public offer of securities. Depository participants, clearing corporations and custodians perform account maintenance, settlement guarantee and safekeeping functions respectively, not issue management.
- AMerchant banker (book running lead manager)Correct
- BDepository participant
- CClearing corporation
- DCustodian
Explanation
A merchant banker, acting as book running lead manager, is appointed by the issuer to manage and market a public issue. A depository participant only maintains demat accounts, a clearing corporation guarantees settlement of trades, and a custodian safekeeps assets of institutional clients.
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