Selling securities to a small group of select investors. Participants Issuers: Corporations or governments raising funds.
Enables diversification and the use of hedging tools. 4. Summary of Key Differences Primary Market Secondary Market Asset State New securities only Existing, "pre-owned" assets Capital Flow From investor to the issuer Between investors Price Setting Fixed by management/underwriters Fluctuates via supply and demand Access Primarily institutional Open to retail and institutional 5. Regulatory Oversight Capital Market Finance: An Introduction to Prim...
Focused on long-term financing, distinguishing them from short-term "money markets". Selling securities to a small group of select investors
To ensure fairness and protect investors, capital markets are heavily regulated by government bodies: Securities and Exchange Commission (SEC) . India: Securities and Exchange Board of India (SEBI) . To ensure fairness and protect investors, capital markets
Allows investors to quickly convert their investments back into cash.
Investment banks that manage the issuance and guarantee the sale.
Capital formation and the efficient allocation of resources. 2. The Primary Market: The Launchpad