Capital market-secondary market, Financial Management

Secondary Market

The secondary market is also referred to as the stock market where dealings in shares are taken up. It helps the shareholders to find buyers for trading. Thus, it creates liquidity in the capital market. Portfolio managers undertake buying and selling of shares so as to adjust their portfolio. It is called secondary market because trading of shares takes place in this market after they are issued to the shareholders. Thus, the secondary market is that segment of the capital market, where the outstanding securities issued by the Central and the State Governments, public bodies and corporate entities are traded. It is an open auction market where buyers and sellers meet and evolve a competitive price for the securities.

The secondary market in India consists of twenty four stock exchanges including an Over-The-Counter Stock Exchange (where small sized companies are listed) recognized by the government under the Securities Contract (Regulation) Act, 1956. These stock exchanges, operating under the rules, bye-laws and regulations approved by the government, constitute an organized market for the outstanding securities. In order to bring in the effect of objects of the legislation under the SCRA, the Government promulgated the Securities Contract (Rules), 1957. These are statutory rules and comprise Code of Standardized Regulations applicable to all recognized exchanges. Thus, the Securities Contract (Regulation) Act, 1956, and Securities Contract (Rules), 1957, both comprise the entire range of legal framework for regulating the stock exchanges and protecting the interest of the investors.

Posted Date: 9/10/2012 5:37:16 AM | Location : United States







Related Discussions:- Capital market-secondary market, Assignment Help, Ask Question on Capital market-secondary market, Get Answer, Expert's Help, Capital market-secondary market Discussions

Write discussion on Capital market-secondary market
Your posts are moderated
Related Questions

Define the term- Cash purchases     Shareholders of the target company are bought out completely and have no further stake in business. This is good if predator shareholders want

These were first issued during a period of extreme interest rate volatility in the late 1970s. Floating-rate bonds, which are also known as variable-rate bonds or simpl

a) Product portfolio refers to the diversity of the different product lines produced by a business. In this case, Mattel's product portfolio includes: board games, toy cars, cuddly

Why do total assets equal the sum of total liabilities and equity?Explain. Assets = Liabilities + Equity Assets are the entities of value a business owns. Liabilities ar

Q. Show External business risk? External risk is the result of operating conditions imposed on the firm by circumstances beyond its control. The external environments in which

Evaluate the importance of leverage of financial management on a small scale company.

Q. Describe the Walters dividend model? Walter's Model: - Walter's model maintains the doctrine that the dividend policy is relevant for the value of the firm. As-per to the Wa

Question: (a) Explain and discuss the hedging strategies using futures (b) Boeing (an American company) delivered on 1st September 2008 an airplane to a Canadian company.

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Addi