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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market

Which of the following is a primary market activity rather than a secondary market activity?

A company listing new equity shares through an Initial Public Offer is a primary market activity, because the securities are being issued for the first time to raise capital. Buying or selling already listed shares or bonds on an exchange is secondary market trading between investors.

  1. AA retail investor buys 50 shares of a listed company on the NSE
  2. BA company lists new equity shares through an Initial Public OfferCorrect
  3. CA mutual fund sells shares of a listed firm on the BSE
  4. DAn investor sells listed bonds through the exchange order book

Explanation

The primary market is where securities are issued for the first time to raise capital, as in an IPO. Trading of already issued, listed securities among investors on an exchange is secondary market activity, so the other three options describe secondary trades.

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