Introduction to the Security and Securities Market
Securities are transferable financial instruments or contracts that show evidence of indebtedness or ownership interest in the assets of an incorporated entity. These include equity shares, preference shares, debentures, bonds, and other such instruments. These are issued by companies, institutions, or the government.
This is done in order to raise funds from investors. Investors who invest in these securities with the objective of converting their savings into financial instruments They expect great returns on their investment to beat inflation and strengthen their financial standing.
In order to smooth the entire process of investment and facilitate both buyers and sellers of these securities. The securities market came into existence. In our country, the securities market operates and functions properly under the supervision and guidance of SEBI (Securities and Exchange Board of India). Which is a regulatory body created under Section 3 of the Sebi Act, 1992, under an act of parliament in order “to protect the interest of investors in securities and to promote the development of and regulate the securities market and for matters connected therewith or incidental thereto”.
Further, the securities market can be divided into two parts, namely, the primary market and the secondary market.
●The primary market, also called the new issue market, is where issuers raise capital by issuing securities to investors. Fresh securities are issued in this market.
●Secondary market: the secondary market facilitates trades in already issued securities, thereby enabling investors to exit an investment or new investors to buy the already existing securities.
