A market intermediary is an entity that plays the role of a middleman in a transaction between the seller of a product or service and the purchaser of that product or service. These entities connect the organisations that are in need of financial resources with the investors who are willing to lend funds to such organisations.
Types of Market Intermediaries
The term market intermediaries includes players in the primary market such as merchant bankers, registrars to an issue, bankers to an issue, depositories, depository participants, investment advisors, underwriters, portfolio managers, asset management companies, custodians of securities, clearing members, credit rating agencies, trading members and trustees of trust deeds. It also encompasses those in the secondary market such as stock/share brokers and sub-brokers (term defined in the SEBI (Intermediaries) Regulations, 2008.
Services provided
The services provided include issue management, portfolio management, underwriting, credit advisory services, stock broking, mergers and acquisitions, corporate counseling, capital restructuring, credit syndication, debenture trusteeship, etc.
Regulation
Registration with the Securities and Exchange Board of India is mandatory. SEBI has spelt out their functions, responsibilities and the code of conduct by which they have to abide and has the right to inspect their functioning and impose penalties for violation of regulations.
