FAQsВ on Secondary Marketplace
Disclaimer: TheseВ FAQsВ are not the interpretation of law nevertheless provide only a simplistic explanation of terms as well as concepts associated with Secondary industry. All information continues to be updated until February twenty eight, 2009. For full information of laws and regulations governing the secondary marketplace, please make reference to the Acts/Regulations/Guidelines/Circulars appearing beneath the Legal Platform Section. В Some of the Inquiries forВ FAQsВ may be as follows:
1 . Understanding " Financial MarketsвЂќ
2 . Understanding " Function of SEBI in the supplementary marketвЂќ
several. WhoВ isВ a broker and sub-broker?
4. Precisely what is MAPIN?
five. What is margin trading service?
6. Precisely what is securities financing and credit scheme?
Understanding Financial Marketplaces
1 . В В В What are the different kinds of financial markets?
The financial markets can easily broadly always be divided into funds and capital market. В
Market bourse: Money market is a market intended for debt securities that result in the short term usually less than one year, as an example the market intended for 90-days treasury bills. The foreign exchange market encompasses the trading and issuance of short termВ nonВ equity debt tools including treasury bills, commercial papers, brokers acceptance, accreditation of deposits, etc . В
Capital Market: Capital market is an industry for long-term debt and equity stocks and shares. In this market, the capital money comprising of both value and debt are released and bought and sold. This also includes private placement sources of financial debt and fairness as well as arranged markets just like stock exchanges. Capital marketplace can be further divided into main and secondary markets. В
2 . В В В What is meant simply by Secondary Marketplace?
Supplementary Market refers to a market in which securities are traded following being at first offered to the general public in the main market and/or listed on the Stock market. Majority of the trading is done in the supplementary market. Second market consists of equity market segments and the debts markets. В
To get the general entrepreneur, the supplementary market offers an efficient platform for trading of his securities. Pertaining to the management of the company, Secondary collateral markets function as a monitoring and control conduitвЂ”by assisting value-enhancing control activities, permitting implementation of incentive-based supervision contracts, and aggregating information (via selling price discovery) that guides administration decisions. В
3. В В What is the difference involving the primary industry and the second market? В
Inside the primary market, securities are available to public for registration for the purpose of bringing up capital or perhaps fund. Extra market is a great equity trading opportunity in which already existing/pre- given securities happen to be traded between investors. Secondary market could be either public auction or seller market. When stock exchange is definitely the part of an auction marketplace, Over-the-Counter (OTC) is a section of the dealer market. В
SEBI and its Position in the Supplementary Market
4. В В What is SEBI and what is its role?
The SEBI is the regulating authority proven under Section 3 of SEBI Take action 1992 to guard the passions of the investors in investments and to showcase the development of, and also to regulate, the securities marketplace and for issues connected therewith and incidental thereto. В
5. В В В What are the several departments of SEBI managing trading in the secondary market? В
The following departments of SEBI take care of the activities in the secondary market. |Sr. No . |Name of the Department |Major Actions | |1. |Market Intermediaries Registration and |Registration, guidance, compliance monitoring and home inspections of | | |Supervision department (MIRSD) |all marketplace intermediaries in regards to all sectors of the marketplaces | | | |viz. equity, value derivatives, debts and personal debt related | | |...