FINANCE

Changing Capital Market Structure and its Impact

Changing Capital Market Structure and its Impact

Introduction

The capital market can be defined as the market in which operators raise capital through the issuance of financial instruments, primarily securities. The financial market is a continuous process of transformation of savings into capital, which takes place between financial investors and in kind by means of financial instruments - otherwise you could say that the financial market is a "trade" or a shift of capital from investors having it in excess to those who have need.

Discussion & Analysis

Capital market structure is divided into two segments:

money market

capital market

The money market is part of the financial market, whose subject is the capital of the date of return to one year, i.e. the market for short-term financial instruments (bills, checks, certificates, etc.), interbank deposits and short-term loans.

The capital market is part of the financial market in which capital is traded on the date of return of more than one year, i.e. the market for medium-and long-term financial instruments (stocks, bonds) and long-term loans. The capital market in the traditional sense is often identified with the securities market. Capital markets operate medium-and long-term financial instruments. The most important of these securities are, therefore, this market is called market securities. Security is a document certifying and guaranteeing property rights, which is fixed in this version and in such a way that may constitute a separate subject of public trading. Securities are written documents constituting proof of deposit and state the property of its owner. They confirm the claims (public loans, bonds) or ownership (stocks, shares, certificates) (Bhagat, 2002, 231-274).

The basics of the capital market activities are:

equal access to information

dematerialized trading

centralization of marketing

Equal access to information provides transparency in capital market. This effect is achieved by imposing information requirements on issuers in ...