1. Meaning of capital market
  2. Reasons for capital market regulation
  3. Types of regulation
  4. Stock Exchange Market


Capital Market

A capital market is a market for securities (debt or equity), where business enterprises and governments can raise long-term funds.

It is defined as a market in which money is provided for periods longer than a year. The capital market includes the stock market (equity securities) and the bond market (debt).

Capital Market Regulator

Securities and Exchange Commission (SEC): This is the body that oversees the capital markets to ensure that investors are protected against fraud, among other duties.

Regulation is the activities of government-established regulatory agencies to control monitor and supervise the operations of the capital market. In Nigeria, SEC is directly vested with this power of regulation.

Classification of Capital Market

  • Primary market
  • Secondary market

Primary market: This is where new stock or bond issues are sold to investors through a mechanism known as underwriting.

Secondary Market: This is where existing securities are sold and bought among investors or traders, usually on a security exchange, over the counter or elsewhere.

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