Meaning of Security Market:

Security market is the market for Equity, debt & derivatives.Debt Market may be divided into 3 parts i.e Government Security Market, Corporate Debt Market, Money Market. Derivative may be divided into 2 parts i.e Option Market & Future Market.

Except derivative Market, each of market has 2 components.

a)                 Primary Market ( where new securities are issued)

b)                Secondary Market  ( Where outstanding securities are traded)

 

Participants in Security Market:-

·        Company Law Board ( CLB) responsible for administration of Company Act, 1956

·        RBI responsible for supervision of Banks, Money Market & Govt. Securities Market

·        SEBI responsible for the regulation of Capital Market

·        DEA (Department of Economic Affairs) arm of Government is concerned with functioning of financial market as a whole.

·        DCA (Department of Company Affairs) arm of Govt. responsible for administration of Corporate bodies. 

Primary Equity Market/ New Issue Market ( NIM)

When a new company is floated, its shares are issued to public in primary market known as Intial Public Offer ( IPO). It does not have a physical structure or form. All the agencies which provides the facilities & participate in process of selling new issue to investors constitute NIM.