CONTENTS:
- Meaning of capital market
- Reasons for capital market regulation
- Types of regulation
- 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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