There are several components to stock trading:
Broker: There are brokers that are authorised to trade at the exchange. The exchange cannot deal with a large number of investors hence it has evolved as a hub & spoke model. Invest in stocks need to open a Dematerialisation: account with the broker and trade through the broker.
Exchange: Exchanges ensure that the buy and sell orders placed by the brokers’ are appropriately matched and executed. Orders are executed starting with the highest bidder matched with the lowest price quoted.
Sebi : Sebi stands for Securities and exchange board of India. Sebi regulates the stock exchanges. It ensures fair practice, provides governance through guidelines and audit.
Govt: Though the govt does not play a direct role in stock exchanges, yet it influences stock trading through its Fiscal policy, taxation and political development.
Bank: Dmat are linked with bank accounts for to & fro transfer of cash.
