SECONDARY MARKET

Secondary Market refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the Stock Exchange. ‡Majority of the trading is done in the secondary market. ‡As a general rule, the greater the number of investors that participate in a given marketplace, and the greater the centralization of that marketplace, the more liquid the market.

‡ Secondary market is also known as "after market ‡ In the New York Stock Exchange, all the stocks belong to the secondary market. ‡ Some of the well known stock exchanges are NSE,BSE,NYSE,NASDAQ,LONDON STOCK EXCHANGE. ‡ Considered as the barometer of the economy.

DIFFERENCE BETWEEN THE PRIMARY MARKET AND THE SECONDARY MARKET?
In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. WHERE AS Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors.

FUNCTIONS OF SECONDARY MARKET
‡ For the general investor, the secondary market provides an efficient platform for trading of his securities. ‡ For the management of the company, Secondary equity markets serve as a monitoring and control conduit-by facilitating value-enhancing control activities. ‡ The secondary market plays a very vital role as one of the indicators of the industrial development of a nation. To analyze the trading intensity in the world stock exchanges. ‡ To explain the investor awareness/ assistance/ education programs arranged by SEBI

Products available in the Secondary Market
‡ ‡ ‡ ‡ ‡ ‡ ‡ Equity Shares Rights Issue / Rights Shares Bonus Shares Preferred Stock / Preference shares Cumulative Preference Shares Cumulative Convertible Preference Shares Security Receipts

Products available in the Secondary Market Contd.
‡ ‡ ‡ ‡ ‡ Debentures Bond Commercial Paper Treasury Bills Government securities (G-Secs)

SEBI AND ITS ROLE
The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto.

Sign up to vote on this title
UsefulNot useful