Structure of the securities market.  Structure of the securities market Structural elements of the securities market

Market securities is a set of economic relations that arise between various economic entities regarding the mobilization and placement of free capital in the process of issuing and circulating securities.

Primary market is the acquisition of securities by their first owners. This is the first stage of the security sales process and the first appearance of the security on the market. Secondary market is the circulation of previously issued securities, i.e. the totality of all acts of purchase and sale or other forms of transfer of securities from one owner to another during the entire period of circulation of the security.

Depending on the level of regulation, securities markets consist of organized and unorganized.

Organized The securities market is a circulation based on rules established by governing bodies between licensed professional intermediaries - market participants on behalf of other participants. Unorganized market is the circulation of securities without observing rules that are uniform for all market participants.

Depending on the place of trading, there are exchange and over-the-counter securities markets.

Exchange the market is based on trading securities on stock exchanges, therefore it is always an organized securities market, since trading on it is carried out strictly according to the rules of the exchange and only between exchange intermediaries, who are carefully selected among all other market participants.

OTC market is the trading of securities without going through the stock exchange. It can be organized or unorganized.

Depending on the terms for which transactions are concluded, the securities market is divided into cash and futures.

Cash The securities market is a market with immediate execution of transactions within one to two business days.

Urgent– this is a market in which transactions are concluded with a execution period exceeding two business days.

The securities market performs a number of functions, which can be divided into two groups: 1) general market functions inherent in any market; 2) specific functions that distinguish it from other markets.

TO general market include:

• commercial function, associated with making a profit from operations in a given market;
• price function with the help of which the process of formation of market prices, their constant movement, etc. is ensured;
• information function, on the basis of which the market produces and communicates to its participants information about the objects of trade;
• regulatory function associated with the creation of rules for trade and participation in it, the procedure for resolving disputes between participants, establishing priorities and the formation of governing bodies and

Structure of the securities market

The securities market, like any other market, is a complex structure with many characteristics. Taking into account the dependence on this, it can be considered from different sides, and its different characteristics in pairs reflect one or another side of the securities market. The components of the securities market are based not only on one or another type of security, but also on the method of trading on this market in the broad sense of the word. From these positions in the securities market, it is extremely important to distinguish markets ( rice. 17 presentations .):

‣‣‣ primary and secondary;

‣‣‣ organized and unorganized;

‣‣‣ exchange and over-the-counter;

‣‣‣ traditional and computerized;

‣‣‣ cash and urgent.

Taking into account the dependence on the stage of circulation of a security, primary and secondary markets are distinguished. The primary market is the market in which the initial offering of a security occurs. The function of this market is to mobilize new capital.

.Secondary market - it is the market in which previously issued securities are traded. In this market, resources are redistributed among subsequent investors.

Considering the dependence on the level of regulation, securities markets can be organized And unorganized. In the first, the circulation of securities occurs according to firmly established rules that regulate almost all aspects of market activity; in the second, the participants in the transaction independently agree on all issues.

Taking into account the dependence of the place of trading, exchange and over-the-counter securities markets are distinguished. Exchange market means that securities are traded on stock exchanges, but most types of securities are traded outside of exchanges. If the exchange market is essentially always an organized market, then over-the-counter market should be both organized and unorganized ("street", "spontaneous"). Today, in countries with developed market economies, only the organized securities market, which is represented by either stock exchanges, or over-the-counter electronic trading systems.

Considering the dependence on the type of trading, the securities market exists in two main forms: traditional and computerized.

Traditional market- This is a traditional form of securities trading in which sellers and buyers of securities (usually represented by stock intermediaries) meet directly at a certain place and public, transparent trading takes place (as in the case of stock trading) or closed trading, negotiations are conducted, which - the reasons are not subject to wide publicity.

Computerized market- these are various forms of securities trading based on the use of computer networks and modern means communications. It is worth saying that they are characteristic of him.

a) lack of a physical meeting place for sellers and buyers; computer trading places are located directly in the offices of companies trading securities, or directly their sellers and buyers;

b) the non-public nature of the pricing process, automation of the securities trading process;

c) continuity in time and space of the process of trading securities.

Taking into account the dependence of the periods on which transactions with securities are concluded, the securities markets are divided into cash and futures. Cash market (spot market, cash market) is a market for immediate execution of concluded transactions, while purely technically, their execution can take up to one to three days if delivery of the security itself in physical form is required.

Futures securities market is a market with delayed, usually several months, execution of a transaction. As a rule, traditional securities (stocks, bonds) are traded on the cash market, and contracts for derivative instruments of the securities market are traded on the derivatives market.

Structure of the securities market - concept and types. Classification and features of the category "Securities Market Structure" 2017, 2018.

2. Structure of the securities market

3. Concept and types of securities

4. Securities market participants

5. Securities market infrastructure

6. Professional securities market participants

7. Regulation of the securities market

Securities market is a system of relations regarding the issue and circulation of securities that develops between its various participants: issuers, investors, professional participants, government agencies.

In this market, a special product is formed and circulated - securities.

Security - this is a document certifying the right of its owner to demand the fulfillment of certain obligations on the part of the person who issued the paper.

The specifics of this product give rise to the characteristics of the securities market:

securities can simultaneously be title to property, debt obligation, the right to receive income and the object of property rights;

securities have no value, but express a certain amount of real capital invested in production.

In view of the above, securities market is a system of institutions that ensure interaction between sellers and buyers in the process of movement of a special product - a security.

In this definition, when considering the market, the emphasis is on the analysis of its institutional infrastructure:

organizing the issue and circulation of securities;

interaction between its participants;

regulation of their activities.

Target the securities market consists of accumulating cash with their subsequent redistribution between various market participants based on various transactions with securities.

Basic task the securities market is to ensure the effective and rapid transformation of savings into investments on terms that suit sellers and buyers. Offer securities are provided by corporations and the state, demand is formed by collective (institutional) investors and the population, who, ultimately, act as the main suppliers of funds to the stock market.

The securities market performs a number of specific functions , each of which is implemented depending on the needs of economic development:

investment – economically the most important, through the issuance and circulation of securities, money capital is mobilized for the purpose of organizing and expanding production;

redistributive – securities are the means by which the mechanism of capital flow between industries and spheres of the economy works, as well as the transfer of household savings into investments;

property redistribution function – through transactions with issued securities, the activities of corporations are controlled;

informational – through the current state of the securities market, information is provided about trading objects, the state of issuers, professional market participants, etc.

maintaining liquidity government debt – registration of public debt with securities (securitization);

deficit financing state budget without additional issue of funds;

regulatory function – determination of the rules for trading securities, principles of interaction and other organizational conditions of market participants.

Contributing to the redistribution of temporarily free capital securities market, functions, structure and segments, which will be discussed below, plays important role in countries with market economies. In previous publications we have already briefly discussed the classification of securities and its types, but now we will devote more close attention features of the structure of the securities market.

Securities market: functions, structure and objectives

The securities market, the functions, structure and objectives of which partly depend on the legislation and level of development of the state in which it operates, acts as an intermediate link between the money market and the capital market.

The RCB performs a number of functions – both general market ones, inherent in each market, and specific ones. At the same time, there are several approaches to dividing the structural functions inherent in the securities market into specific and general market functions.

In general, there are such general market functions as

• commercial - making a profit from transactions with the Central Bank
• pricing - ensuring the process of determining prices for specific securities instruments (goods)
• regulatory - the RCB develops trading rules and monitors their implementation by market participants, ensures legal decision disputes between its participants
• informational - providing access to information about the state of the market and transactions concluded on it.

In addition, among the functions inherent in the securities market, they include the creation of a structure (system) necessary for servicing clients of organizations - clearing companies, depositories, etc.

There are also 2 functions of the RCB, which are different sources belong to both the general market group and the specific group:

• redistribution of capital
• insurance of financial and price risks.

The accounting function of the securities market is also specific - registration of market participants, accounting of all securities, recording stock transactions.

Structure of the securities market

The institutional structure of the securities market is as follows:

• investors
• issuers
• professional participants.

In addition, taking into account the different characteristics of the stock market classification, there are several structural schemes for constructing securities market.

Based on the nature of the movement of the Central Bank, the stock market is divided into two large segments: primary and secondary. According to the organization of trade, securities market banks are divided into.

Based on the principle of return of capital to the investor securities market structure includes:

• market of equity securities - shares
• debt market.

The structure of the securities market, taking into account the instruments that trade on it, also includes the investment and money markets. In the money market, securities with a circulation period of up to 12 months rotate, in the investment market - medium-term and long-term instruments.

Depending on the time frame during which concluded transactions are executed, the structure of the securities market is divided into segments of cash and urgent transactions. The first type of operations is performed within 3 days; urgent operations are characterized by delayed execution of the transaction.

The securities market is a set of economic relations regarding the issue and circulation of securities as instruments for financing and economic development. On the securities market, the commodity is securities. Therefore, the RCB is a securities trading market. The RCB is an integral part of the financial market.

RCB structure. Depending on the time of arrival of securities on the market, it is divided into primary and secondary. For the first time, securities appear on the primary market, where they are sold by issuers to the first owners. All subsequent operations with the central bank. occur on the secondary market. C.b. cannot appear on the secondary market without going through the primary market.

Depending on the forms of organization of transactions with securities. There are exchange and over-the-counter securities market. Depending on the type of paper sold. There are the money market (security notes with a validity period of up to 1 year) and the capital market (security bonds with a validity period of more than 1 year). Business entities satisfy their needs for working capital, as a rule, in the money market, and for long-term investment capital - in the capital market.

Functions of the RCB:

1) through the issue of securities, savings of individuals and legal entities converted into investments and used to expand and develop production;

2) with the help of the RCB, capital is transferred from aging industries to new, high-tech industries. As a result, the structure of production becomes rational;

3) through the purchase and sale of shares, a change of ownership occurs between shareholders;

4) through the purchase and sale of debt securities, the composition of creditors is changed and debt payment is ensured;

5) by issuing securities, the deficit of state and municipal budgets is covered;

6) with the development of the securities market, risk capital (venture capital) increases, which allows the development of new industries and the owners of securities to receive high income;

7) with the help of the securities market, investors have the opportunity to insure risks by concluding various transactions and using derivative financial instruments.

Participants in the securities market include its direct participants, as well as state and public bodies regulating and controlling it. Direct participants in the securities market are divided into intermarket and intramarket.

Intermarket Participants - these are persons who take part in the work or in servicing the work of several markets at once, including the regional market. Such persons usually include various groups of investors, information, consulting, rating agencies and other professionals who provide necessary services to participants in many markets at once.

Intramarket Participants - these are persons working primarily or exclusively for the RCB. They are divided into non-professional and professional market participants.

Non-professional market participants – These are issuers and any investors working for the RCB.

Professional participants of the RCB- these are persons who carry out professional activities in this market. only if there is a special license to provide a certain type of professional services in a given market. These include:

brokers - these are organizations that enter into transactions for the purchase and sale of securities for their clients at the expense of the clients themselves;

dealers - these are organizations that sell and buy securities on their own behalf and at their own expense on the basis of prices announced by them;

management companies - these are organizations that carry out trust management of securities and investments V them clients' funds;

registrars - these are organizations that maintain lists (registers) of securities owners;

depositories - these are organizations that store and/or record securities of market participants;

clearing organizations – these are organizations that provide settlement services to securities market participants;

market organizers - These are organizations that facilitate (create the necessary conditions) the conclusion of transactions on the securities market.