Structure of the classical securities market
In countries with developed market economies, as a rule, three types of securities market stand out according to a functional feature: primary (over-the-counter), secondary (stock exchange - Stock Exchange) and over-the-counter markets. This division is called classical. The structure of the classical securities market - the market of developed countries can be represented in the form of the following scheme (Figure 5.1).
Fig. 5.1. The structure of the classical securities market
Identified but specific functioning of the market types of securities markets allow you to consider the primary market in terms of its circulation outside the exchange, secondary - in the exchange market, when transactions with securities are made only on the stock exchange, and separately consider the over-the-counter secondary market.
The primary over-the-counter market is the sphere of the first purchase and sale of securities of new issues - hence its name. On it, the security passes the way from the issuer to the first buyer (investor). Only within the framework of this market the issuer can receive the capital necessary for it. Further movement of the security, i. from the first buyer to the next, can not be a source of revenue for the issuer.
In the primary securities market, legal entities can obtain both their own (issue of shares) and borrowed (issuance of bonds and other debt securities) capital. But the loan received in the stock market due to debt securities should be returned at the appointed time, and the capital created by the issue of shares should not be returned. The condition for obtaining equity is the acquisition by organizations of the status of a joint-stock company.
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A characteristic feature of the primary OTC market is its main purpose - financing the process of reproduction. The primary market, which has its own placement methods, is an independent, rather complex and ramified mechanism through which new issues of shares and bonds that go to their subsequent purchase on the stock exchange are skipped.
In developed countries, new bonds of commercial and industrial corporations are actively used in this market. Annually, the US market places bonds worth $ 2-3 trillion.
Intermediaries in the implementation of such transactions in this market, as a rule, are investment banks and banking houses with credit and financial institutions that purchase these securities. The relationship between the issuer and the investor allows for the widespread use of such methods of securities placement as underwriting, public offering ( public, offer ) in the USA, Canada and England, direct placement ( direct placement), as well as competitive bidding ( competitive bidding).
The volume and value of shares of primary turnover are much inferior to those of the exchange. The broad output of shares in the US on the primary market is mainly due to speculative transactions and the specifics of the formation of new companies. The cost of placing shares here may be lower than on the exchange, where usually specialized high-value intermediaries operate. Affects the costs and the fact that ordinary shares of the US do not have a face value, and their holders do not receive preferential rights in the event that companies hold their additional issues.
This specificity was due to the cyclical upsurge and the desire of American capital to replace the production machinery in the face of intense competition in the world market from Japan and Western Europe.
The stock exchange is a definite place with fixed rules and the time for holding trades in goods, currencies, securities and derivative financial instruments.
A stock exchange can have a specific location or exist only in electronic form. Thus, the world's largest securities exchange is the New York Stock Exchange ( New York Stock Exchange , NYSE ). is located in a building at the intersection of Wall Street and Broad Street in Lower Manhattan, and the system "Automated quotations of the National Association of Securities Dealers" ( NASDAQ ) exists only in electronic form.
Impersonates the financial strength of the United States and the financial industry around the world - NYSE (New York Stock Exchange), founded in 1792. As of 2012, The York Stock Exchange trades over 3,500 companies. Shares and bonds of companies are distributed by sector.
The second largest world stock exchange is Tokyo. It trades stocks and bonds of more than 2800 companies. One of the oldest stock exchanges in the world (its history dates back to 1570) is the London Stock Exchange. The market on this exchange is divided into the main one - with the strict requirements of UK legislation and the alternative, where the requirements are simpler. More than 400 companies are traded on the stock exchange.
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At present, the central exchanges of the leading Western countries are essentially international markets. If you analyze the time of trading the world's major exchanges, you can see that trading in this market in terms of international integration can be done around the clock, i.e. The secondary (exchange) market today is constantly trading in large international centers or special financial enclaves of small countries.
The role of the stock exchange is in the redistribution of capital, therefore in this market securities that have passed the primary market are mostly resold. This is typical for countries such as the United States and Japan. Shares prevail in the stock market of developed countries, although there are also buying and selling other types of securities. A significant part of the operations in this market is carried out by individual investors.
At present, the role of the exchange in the trading of securities has somewhat decreased. The main reasons for this phenomenon include:
• increase in trade in securities through the interbank market;
• relocation of bond trading to the primary market;
• displacement of small investors from the exchange by credit and financial institutions;
• development of parallel securities markets;
• transfer of individual depositors' funds from the exchange to savings accounts of banks as a result of decrease in stock prices under the influence of unstable economic conditions.
As a result of the influx of funds of individual investors, credit and financial organizations are increasingly turning into monopolists - holders of all kinds of securities. This leads to the enlargement of the size of blocks of shares listed on the exchange, up to 1000 or more.
A distinctive feature of the organization of stock exchange trading derivatives on US stock exchanges is the presence of colossal trading halls and trading "with a vote" ( open outcry) in stock pits (pits). Voice trading, unlike the derivatives markets of other countries, is still thriving here, as the US futures markets traditionally include an intermediary in the exchange hall for execution of the warrant. However, today more deals on the world exchanges are made online from remote computers, outside the trading floor. Although historically the largest futures exchange in the United States is the Chicago Mercantile Exchange, Chicago ), futures are traded today through the Globex system ( Globex ), which was created by the Stock Exchange CME together with the news agency < strong> Reuters.
Options and futures also actively trade International Securities Exchange , AMEX, Philadelphia SE , Pacific SE , New York Board of Trade ( NYBOT ), CBOT, NYBOT, as well as the world's largest (by turnover) oil exchange - New York Mercantile Exchange ( ΝΫΜΕΧ ).
In the modern financial system, it turned out that additional issues of shares are important for the expansion of exchange transactions. Thus, the euro zone's stock market is represented by 13 stock exchanges with a total capitalization of about 4.5 trillion euros and a turnover of almost 7 trillion dollars a year.
Despite the fact that the shares in the euro area are traded on different stock exchanges, the development of technology has long allowed to make single access to several exchanges at once. Therefore, some brokerage houses in the European Union provide the service of a "single brokerage account" from which an investor can buy a stock on one exchange and sell it on another.
However, the fact that the euro zone's stock market is seriously behind the US market. This lag can be greatly reduced due to the active development of a single financial and integrated space in the euro area, with the development of an appropriate legal, communicative approach and approach to the "uniform price rules." In addition, the process of mergers and acquisitions of stock exchanges may facilitate the access to the stock market in the euro area market. Only in the past few years, the European Exchange Euronext united the exchanges of the Netherlands, Belgium, France, Portugal (in 2000), and then bought NYSE, , Sweden, the Baltic States, Denmark, and then itself was sold to the American NASD AQ and changed its name to NASDAQ OMX Group. In addition, the Austrian stock exchange acquired a controlling stake in the Hungarian stock exchange, the stock exchange of Slovenia and the Czech Republic, as a result of which yla formed CEE Stock Exchange Group. To date, the exchanges of 9 of the 17 member countries of the eurozone remain independent.
However, weakening the role of the exchange does not reduce its value. The volume of circulation of securities on the world exchanges as a whole is increasing due to not only the development of the entire stock market, but also the strengthening of direct state regulation of operations on the stock exchange, which in the conditions of economic instability for customers is associated with a reduction in the risks of losses. In addition, against the backdrop of the continued computerization of exchange transactions, changes in the speed of forms and methods of collecting, delivering and processing information, a particular trend has become the transformation of exchanges into a center of numerous and rather profound contradictions. An example of this is the company BATS , which appeared in 2005 and was positioned as an alternative to NYSE and NASDAQ. Today it ranks third in the US in terms of trading volume and controls about 11% of the total turnover of shares, as well as about 3% of options turnover and is oriented to getting out of control of system exchanges. At the end of 2011, this exchange operator absorbed its own European rival, Chi-X , and became the largest trading platform in Europe, slightly larger than the English stock exchange. In Europe, through its subsidiary structure BATS Chi -X is more than a quarter of the total turnover of shares - this is the largest trading platform in this part of the world. Nevertheless, the markets BATS still can not be called full-fledged exchanges, since there has not been a single IPO on these sites yet. They are traded only securities that are already circulating on other exchanges: South American stocks, South American options and European stocks. The attempt to transfer operations to its own site, which is more convenient for high-frequency stock trading with the help of bots, ended badly by holding IPO of its own shares. For 900 milliseconds, the share price of BATS dropped to almost zero, to 4 cents. The Exchange stopped trading, canceled all transactions, and then completely refused to conduct the IPO . IPO of the company killed computer hft -algorithm launched from terminals of an unidentified trader.
Secondary over-the-counter ("street") market is the sphere of mostly direct (without intermediary) securities purchase and sale transactions that have passed through the primary market and are concluded outside the exchange.
The main feature of the over-the-counter market is the indicative nature of quotations, a special settlement system and the mechanism for making transactions. They are carried out, as a rule, through a market network of dealers using the Internet. Initially, on the OTC market, transactions were conducted directly in the bank through an office stand, so this market was also called the market of trade "through the counter". Today, the OTC market consists of two segments: organized (strict rules are in place) and unorganized, where retail clients trade securities.
The main parameters of the over-the-counter market:
- financial instruments circulating in this market;
- the composition of the participants;
- the presence of a specific serving infrastructure;
- the mechanism of regulation of this type of over-the-counter market;
- the rules for working with this financial instrument;
- bidding rules.
The OTC market is represented by the interbank market of securities, the auction network, telephone dealer markets, "street" trade in securities, automated trading systems, telecommunications networks, through electronic terminals located in the offices of institutional entities. Trade is carried out by large lots (packages) of securities, i.e. on a wholesale basis.
The concentration of huge packages of securities from financial institutions allows them to carry out buying and selling outside the exchange. Over the past 15-20 years, direct transactions between credit and financial organizations for the sale and purchase of securities have become very popular, which has enabled them to save on commissions and other fees paid earlier to brokerage firms and the exchange committee. The development of new forms for the placement of securities contributed to the creation of several fictitious capital trading markets, which continue to function actively at the present time and undermine the activities of the exchange, reducing its role to registering quotations of securities in the over-the-counter turnover. The over-the-counter securities market has gained the most popularity in the US, where a large number of transactions with non-government securities are conducted. Currently, there are several non-market securities markets in the US that are differentiated depending on the methods of placement of shares and bonds, as well as on the timing of their issue.
All units of this securities market are highly organized and fully manageable. They are managed by both the state and self-regulating organizations of professional participants in the securities market, for example, NASDAQ in the US or NAU FOR in the United States. The Automated Quotation System of the National Association of US Securities Dealers ( NASDAQ ) became the world's first automated electronic over-the-counter secondary market for securities. Under this system, more than 5,000 shares of companies are traded. More than 50 countries participate in trade, which make transactions with remote terminals.
Such a system is active in Singapore and some other countries, but in Japan the existing over-the-counter stock trading system for young issuers - JASDAQ, modeled with NASDAQ, - low power. OTC market in Japan is primarily a bond market.
Thus, the modern securities market consists of three main divisions: the primary over-the-counter market; stock Exchange; organized secondary OTC ( street ) market. Primary street markets are over-the-counter. Stock exchange and street The market, with rare exceptions, functions as secondary markets. On the stock exchanges of individual developed countries, in addition to the main, there are alternative markets. They differ less strict requirements to the quality of securities and are designed to facilitate access to individual issuers on the stock exchange. The turnover of these markets is significantly lower than the main one.
Developed by the structure of the stock market requires a complex system of organization. First and foremost, a perfect legislative base is needed, which is the guarantor of a reliable and balanced investment mechanism. At the moment the most regulated in the legal field, liquid, having a wide range of exchange instruments are US stock markets. According to the unfolding trends in the world, one of the most important conditions for optimizing the structure of the securities markets is the transformation of national financial markets into world financial centers. The ongoing transformations make it possible to increase the competitiveness of the economies of the world, stimulate the growth of their influence and are a condition for the economic and political sovereignty of the state.
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