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Secondary

Market

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Secondary market is the segment of thecapital market where securities (sharesand debentures) that have been

issued/listed in stock exchanges arebought & sold for either investment orspeculation.

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Basis ofDierence

Primary Market Secondary Market

Deals with Deals with the sale ofonly new securities

Deals with the sale andpurchase of alreadyexisting securities.

Objectives Creating long termsecurities formobilizing capital equitydebt

!ro"iding liquidity to theseinstrumentsmarkets byfacilitating transactions

Determination ofprice ofsecurities

#he price of securitiesis decided by themanagement of thecompany $under theS%&' rules(

#he price of securities isdetermined by the forcesof demand and supply forsecurities.

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Basis ofDierence

Primary Market Secondary Market

Location #here is no )xedgeographical location

#he stock market is theplatform through whichtransactions happen

dministration 't has no tangible formof administrati"estructure

't has a de)niteadministrati"e structurethat facilitates trading insecurities

!ole ofconcernedcompany

#he securities are solddirectly by thecompany to thein"estors.

#he company does notplay a role as thesecurities are exchangedamong the in"estorsthemsel"es.

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!ro"iding a market place for securities transaction 'mparting liquidity marketability for equity and

debt instruments %nsuring safe and fair dealing in securities so as to

protect in"estors* interests +acilitating price disco"ery ,inking sa"ings and in"estment- and thereby

facilitating capital formation

+acilitating foreign in"estment- in particular +''s %nforcing market discipline on corporate entities +acilitating the functioning of !rimary market

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Stock %xchange Clearing Corporation Depositories D!

&rokers egistrar to an 'ssue and Share #ransfer

/gent &uyers and sellers

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#he Securities Contracts $egulation( /ct-0123 de)nes a stock exchange as

4an association- organization or body of

indi"iduals- whether incorporate or not-established for the purpose of assisting-regulating and controlling the business inbuying- selling and dealing in securities4.

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/ Stock exchangeor securities market is anorganised market where listed securities arepurchased 5 sold for in"estment or

speculation.

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/ stock e"chan#eis an entitythatpro"ides 4trading4 facilities forstock brokersand traders to trade stocks-bonds- and other securities.

Stock exchanges also pro"ide facilities forissue and redemption of securities andother )nancial instruments- and corporatee"ents including the payment of income

and di"idends.

http://en.wikipedia.org/wiki/Entityhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Stock_brokerhttp://en.wikipedia.org/wiki/Entity

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Securities traded on a stock exchange includeshares issued by companies- bonds- unit trusts$Mutual +unds(- pooled in"estment products and

deri"ati"es.

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't is an organized market 't is a market for )nancial securities 't is an important constituent of capital market i.e.- market

for long6term )nance 't is a "oluntary association of persons- with restricted

membership 'n a stock exchange- only the members can deal engage

in transaction i.e.- buy 5 sell securities #he members of a stock exchange can buy and sell

securities either as brokers for 5 on behalf of their clients #he dealings in a stock exchange are under certain

accepted code of conduct i.e.- rules and regulations

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$% !eady and &ontinuous Market'% Li(uidity for securities

)% Promotes Savin#s * &apital+ormation

,% -nvestor Protection

.% /overnment +undin#

0% 1valuation of Securities

2% -ndustrial Development3% Price stability

4% +acilitates +low of +orei#n &apital

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5 dvanta#es to the -nvestors0. ,iquidity of in"estment

7. %"aluation of securities

8. Corporate news

9. :rie"ance redressal

2. ;igher returns

3. 'n"estor education

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B5 Bene6ts to companies0.!ublicity and image de"elopment

7.%asy raising of large "olume of funds

8.Market discipline 5 corporate go"ernance

9.Sourcing of international funds

2.+acilitates expansion

3.+acilitates mergers and acquisitions

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&5 Bene6ts to the economy0.&usiness de"elopment

7.Sa"ings mobilisation

8.:o"ernment funding

9.Capital formation

2./"ailability of foreign capital

3.!romotion of industrial democracy