It start from order placed by demat account holder, then it goes to Stock exchange via broker who is connecting exchange and those who are placing buy/sell order. Bank account linked to demat account is used for funding the demat account and for margin payment.SEBI is regulatory authority for controlling exchanges. Govt is having indirect control via SEBI. However, Govt Policies will directly affect movement of market at any time.
Stock trading/investment is one if understood properly, will fetch wealth like anything for a common man. This attracts many people towards stock trading.