Secondary securities market
At the secondary securities market is the resale of the securities, which were in turn bought on the primary market. Here for the Issuer stop, focus new financial resources, but only there is redistribution of resources (financial resources) among the subsequent investors. In other words, secondary market transactions are made without the participation of the Issuer and on the state of Affairs of the direct impact they do not have. The Issuer anyway, who the owner of and in whose hands now his paper, more important to him to become the volume of obligations under securities. The secondary market is the most active part of the stock market, because here is the majority of transactions with securities, in addition to the primary placement and the primary issue.
The purpose of this market is to ensure purchase and sale of securities after their initial placement. He is able to provide the necessary conditions for a quick and fair resale of the securities. There are also over-the-counter (informal or "street market") and exchange (the organized market) for the secondary market.
All securities traded in the secondary market, strictly ordered or sorted according to their reliability, relevance and other market indicators. Procedure on the ranking and selection of securities is called the listing. The over-the-counter system organized by the trade, or the exchange system of any of the stock exchanges have their own listing of securities, the right to admission to circulation.
As a mechanism of resale, this market allows investors to easily buy and sell of paper. Investors on the secondary market of necessity can get back the money (selling assets), which are invested in securities, as well as to get the profit from operations with them.
Opportunity for the resale of securities is based on the fact that the original owner of these securities is free and has the right to own and dispose of them, and resell them to another investor. In itself the secondary market stimulates the active work of the primary market.
Secondary securities market
If the secondary securities market was poorly organized or did not exist, then the transactions with securities would be impossible or difficult, which could serve as a repulsive factor for investors for the purchase and sale of all or part of the securities. And so society would be at a disadvantage, since the new initiatives of the issuers would be left without the necessary financial support.The operation of the exchange secondary market it is something that belongs to the classical exchange.
Operations over-the-counter secondary market for the custody of securities, purchase and sale, the formation of the portfolio and management, marketing researches, definition of market value, the evaluation of the investment risk and pricing. Compared with the exchange turnover - over-the-counter turnover is characterized by its low-organized, and low регулированностью. The transaction on purchase or sale of securities at the secondary market of produce through traders, investment dealers, intermediaries-brokers.
Two of the function, which performs the secondary market:
1) ensure the liquidity of the securities (brings together sellers and buyers)
2) align the demand and supply
