Introduction To Securities Market

 Securities : The Securities Contract Regulation Act 1956 defines "securities". It includes shares, brands or similar securities of any company, institution and any securities that can be sold in the market. It is one of the regulations made in the Indian capital markets. The Securities Contract Regulation Act 1956 defines "securities". It includes shares, brands or similar securities of any company, institution and any securities that can be sold in the market. It is one of the regulations made in the Indian capital markets.

Securities Market : This is a place where buyers and sellers can make deals for buying and selling shares and debentures etc.  It plays an important role in raising money for the business.

Segment of securities Market : There are two divisions of securities market.

• Primary Market
• Secondary Market

Primary Market - In the primary market, new shares and bonds are issued, so it is also called the new issue market.

In the primary market, the company sells shares to the investor, which provides funds to the company. Investors who invest in the company become partners in it. In the primary market, investors can buy shares but cannot sell them.

In the primary market, companies can provide funds through different methods:

• Public issue
• Private placement
• Right issue

Secondary Market- The secondary market is a place where shares bought in the primary market can be sold in the secondary market. Here the transaction of shares takes place between the buyer and the seller. Large scale trading of securities is done in the secondary market.     

Derivatives Market- Derivatives market is also called futures and options market. Securities are traded in this market but their delivery and payment has to be made in future.

 

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