Securities MarketsAbstractSecurities market provides opportunities for investors to buy and sell shares. They also enable the government, companies and institutions to acquire funds through the sale of shares. For many years, global securities market realized several changes with an aim of delivering improved services to clients. Through the achievement of the essential requirements, securities markets structures are considered as the structures that are dominant in trade execution. Investors who buy a company shares as considered as the owners and gain part of the profits as dividend. They also have the voting rights depending on the volume of their shares.
Investors are interested with a market that is liquid without any cost or transactions delays. Brokers assist investors in various ways such as offering loan services and buying or selling shares on behalf of the investors. They become partners and develop a mutualrelationship where the broker benefits from a commission charged on the transactions. The main aim of an investor is to generate profits through conducting various transactions. However, it is notable that the process may sometime fail to generate the expected return within the stipulated period. For an investor to generate funds through transacting shares and bonds, he must make effective market prediction and determine the future trend. Errors in prediction are likely to cost the investor large volumes of losses.
IntroductionSecurities Market refers to an economic institute where security trading occurs through stockbrokers. It is also considered as the interconnection system where favorable conditions for trade are enhanced (Gode & Sunder, 1993). Securities market is also responsible in transferring real asset into financial asset. It also invests money for both long-term and short-term periods aiming to gain profits. The Securities and Exchange Commission regulates securities markets. Issuing of securities takes place in the primary market. However, all transactions are effected in the secondary markets.
An investor who is willing to buy stock has a high probability of not purchasing during the IPO (Gode & Sunder, 1993). He will instead purchase from the market. Therefore, in securities markets, buyers hardly meet the sellers. The stock exchange firms such as the New York Exchange do buy and sell stocks on behalf (Arnett, 2011). However, trading on both sides is not automatic. Companies willing to trade in the stock exchange must write an application forms so that their securities are accepted to trade. If such a company meets the required conditions, then its securities are listed in the market (Keim & Ziemba, 2000). There are other public corporations with securities, but their shares do not appear in any Exchange list. Such securities are transacted over-the counter. An example of an over-the
Trade is not automatic (Shapiro, 2012; Bue et al. 2011; Dvorak Ѧ Dvorak Ÿ and Vardac, 1979).
The process of exchanging shares is called the stock exchange-style (e.g., Zimba, 1990). The exchange and share exchange must have the same principle: Stock exchange companies typically do only exchange for a lower price than any other company. So, in the case of exchange stock, a company cannot sell for higher at that time (Wooley Ӄ Sexton ѐ) but if a certain amount of capital is available as a share or for a lower price (Alder, 2003), it could sell for that price as well. The exchange will be considered an “exchange of rights,” though, because as long as the stock exchange is a public corporation, if the corporation is not a public one, the exchange can have no use. Moreover, it is an unusual way of handling a stock exchange, because the exchange does not operate outside a specific country or territory. As such, international trading is an exception.
The stock exchange is a public corporation, which includes some of the same types of subsidiaries, and the exchange requires investors from all over the world to complete an application form with the exchange. Therefore, the exchange is legally not legally a public corporation at all. Instead, the exchange serves as an intermediary between investors and the shareholders. In contrast, the exchange is not registered anywhere in the world. Also, only foreign investors who reside in the United States are permitted to own shares in the exchange (Wooley Yousaf, 2005). This makes it possible for those investors to transfer the shares to an outside holding company outside the United States, which may cause a loss. The exchange is also regulated by the U.S. Securities and Exchange Commission (USEC).
This process is somewhat more complicated than the stock exchange. Since there is no public accounting of shares traded in the exchange, investors are required to buy or sell to receive their shares, because it is a public corporation with a specific function for trading. In the case of stock exchanges, the exchange serves as a “sell-through” option of capital invested in the share unit (“share purchase program”). The share purchase program enables investors to buy or sell shares through an exchange that provides information about the capital markets in the country in which they purchased the shares from the share exchange and the underlying issuer. For example, the exchanges may give investors the following information: the price of the stock that the buyer sold, the cost to pay for financing the sale, and a list of the investors who are the original purchasers. The broker or distributor must not make or sell more than the following percentage of the transaction volume and the amount that is to be sold to the buyer: 20% of the transaction volume; 10% of the total purchase volume. In case of direct selling, the broker or distributor will obtain the information from the broker’s or distributor’s securities agent. The broker or distributor can enter any information about a particular company