Types of securities market participants. The main participants in the securities market. Control over professional market participants

(market entities) - these are individuals and legal entities that sell, buy securities or maintain their turnover and settlements on them, entering into certain economic relations related to the circulation of securities.

All participants in the securities market can be conditionally divided into professionals and non-professionals. In accordance with the Law “On the Securities Market”, professional participants in the securities market are legal entities as well as citizens (individuals) registered as entrepreneurs who carry out the following activities:

1. brokerage activity;
2. dealer activity;
3. securities management activities;
4. settlement and clearing activities;
5. depository activity;
6. maintaining a register of holders of valuable paper;
7. organization of securities trading.

Depending on the position that participants take in the securities market in relation to the market, they are divided into sellers, buyers and organizations serving market processes.

In their book, V. S. Torkanovsky and V. I. Kolesnikov divide the participants in the securities market into 4 groups:

1. the main participants in the securities market (state, municipalities, large national and international companies), whose securities are highly reliable, but do not always provide high returns;
2. institutional investors - financial and credit institutions that carry out operations with securities (banks, insurance companies, pension funds, etc.);
3. individual investors - private individuals, including owners of small venture capital enterprises;
4. securities market professionals (brokers, dealers, etc.).

Depending on the functional purpose of all participants in the securities market can be divided into:

1. issuers;
2. investors;
3. stock intermediaries;
4. regulatory and control bodies;
5. organizations serving the market.

Securities Issuers - these are business entities seeking to obtain additional sources of financing, as well as government bodies that issue loans to cover part of government spending. The Law of the Russian Federation of 04.22.1996 No. 39-F3 “On the Securities Market” establishes that the issuer is a “legal entity or executive authorities or local self-government bodies that bear on their behalf obligations to holders of securities to exercise the rights enshrined in by them. ”

The issuer is always a seller who delivers a security to the market, the quality of which is determined by its status, economic and financial results of its activities. The composition of issuers includes:

• state (central government, regional and municipal authorities, large national companies);
• joint-stock companies (corporations in the manufacturing sector, credit sector, large international companies, stock exchanges, financial institutions);
• private enterprises (can issue only debt securities (bonds and bills));
• private individuals (may issue only receipts and checks).

Investors   - individuals and legal entities that have temporarily free funds and who wish to invest them for additional income. Investors acquire securities on their own behalf and at their own expense.

Distinguish:

• institutional (collective) investors - 1) the state; 2) corporate investors (joint stock companies); 3) specialized institutions: specialized funds and companies (banks, insurance companies, pension funds), investment institutions (investment companies, investment funds);
• market professionals - stock intermediaries (brokers, dealers);
• individual investors - individuals who use their savings to purchase securities;
• other investors - enterprises, organizations.

Depending on the purpose of the investment, the following main investment strategies are distinguished:

strategic - long-term investments, purchase of securities for a period of a month to several years in order to profit from the sale at the end of the investment period;

• speculative - designed for short-term and frequent transactions of purchase / sale of securities both during the day and for up to a month with the highest profit from each transaction;
• insurance - the use of securities to insure against possible losses in business or when investing in financial markets.
• Depending on this, investors can be classified into:
• strategic investors who intend to obtain property by taking control of a joint-stock company and expect to receive income from the use of this property significantly more than income from simple ownership of shares;
• portfolio investors who rely only on income from their securities.

According to Alfa Bank experts, at the end of May 2003, management controlled 31.5% of the shares, persons close to management - 14.3, strategic investors had 11.6, the state - 13.6, and remained in free float 27.7% of the shares. The concentration of controlling stakes in the hands of insiders leads to a further narrowing of the instrumental base of the Russian stock market, to reducing opportunities for investors, and expanding the field for price manipulation.

According to the Ministry of Economic Development and Trade, 0.1% of the population is in the Russian stock market in Russia, 8.3 in South Korea, 26.6 in Japan, 36.5 in Australia, 48.2% in the USA .

In practice, there is no clear distinction between issuers and investors, often an economic entity or an investment institution issuing its own securities may be an investor, i.e., buy securities of other issuers.

One of the main issuers and investors of securities are:

investment companies

Professional participants in the securities market are called legal   and individualswho conduct official business in the securities market.

They can be conditionally considered as 8 conditional groups:

1. Professional traders.
2. Brokerage companiesthat are intermediaries between sellers and buyers.
3. Dealers   - they trade securities exclusively on their own behalf and at their own expense.
4. Companies that accept investor money   to manage and trade on their behalf.
5. Registrars   - keep lists (registers) of securities.
6. Depositories   - take into account and store securities, for which they have authority from market participants.
7. Clearing Organizations   - keep accounting and reporting on trading operations with securities.
8. Market organizers   (for example, the stock exchange) - create favorable conditions for trading in securities.

Requirements forprofessional participants   market - have a license   to conduct their activities.

All market participants can still be divided according to another principle into 3 large groups:

• Investors;
• Issuers;
• Intermediaries   between them.

Issuers - enterprises that issue securities and sell them. A   and become new owners.

Professional members   differ in thatare licensed   and bid as intermediaries or organizers. We’ll talk about them now in more detail.

Brokers

They make transactions with stocks and other securities on behalf of customers and at their expense, but can speak on their own behalf. Depending on the nature of the transactions,brokers can be attorneys, commission agents and act by proxy in accordance with the contract.

Dealers

They trade on their own behalf and at their own expense, publicly declaring prices for the purchase and sale of specific securities with an obligation to buy / sell at announced prices.Only a legal entity can be a dealer.

The dealer has the right to declare other significant terms of the contract such as the minimum or maximum number of securities in the transaction, the validity period of the current price.

Securities trust management activities

Below we will talk about trust management. Such market participants are called managers. This does not require a license.

At the same time, the trustee is operating:

• stocks, bonds and other securities;
• money that is trusted for the purpose of investing;
• money and securities acquired in the process of trust trading.

Depositories

They provide services for storage, settlement of transaction results or transfer of rights to securities. Their activities are regulated by contract.

Maintaining the register of securities owners

Those who keeps registers, called registrars or registry holders. They collect, record, process and store data in registers, and also provide information to the owner of securities. Only legal entities can do this.

Registrars   issuer's securitiesif their owners appear in the registries they keep.

Registries   - These are lists of registered owners of shares, bonds and other securities, which indicate the number of securities, category and their nominal value.

Clearing Services

Clearing organizations undertake to collect, verify and correct information on mutual obligations, to carry out settlements on the supply of securities.

Intermarket and intramarket participants

Intermarket   participants coordinate or service the work of several financial markets at the same time. These includeinvestment groupswho invest in various assets - currency, real estate, securities. They also include agencies and private professionals providing services in .

TO intramarket   Participants include persons primarily working in the securities market. They can be both professional market participants and non-professional.

Can professional activities in financial markets be combined?

Easily, but within the framework of legal acts.

For example: the law does not allow combining registry maintenance with other professional activities in the financial market.

Rthe work of brokers, dealers, depositories and managers one organization may well.

Depositories can combine their activities with the functions of a clearing company.

Control over professional market participants

In the Russian Federation, the work of professional market participants falls under the control of the Bank of Russia, which issues 2 types of licenses:

• license allowing you to be a professional participant in the securities market
• trading license

This is the basic minimum that every trader and investor needs to know about market participants. And if you want to move gradually and systematically -, where we will analyze these, and not only questions about trading.

Participants in the securities market combine financial and commodity markets. In addition, the market itself is also divided into individual segments. It sounds a bit confusing, but nothing complicated. If you want to become a professional, communicate with the best on an equal footing, you must, but you must be obliged to understand the main areas of influence of each subject.

Participants in the securities market are also called entities. These are those people, organizations, countries that influence the process itself (in boring textbooks - “enter into economic relations among themselves”).

Categories of Participants

The structure of the securities market is:

• the Central Bank itself and operations with them (issue, purchase, sale, repayment);
• participants;
• infrastructure for service.

Therefore, I consider the participants in relation to the operations of the Central Bank.

Issuers

Securities must first be put on the market. The one who does this is the issuer:

• joint-stock company (shares);
• state, commercial banks (bonds);
• private individuals (derivatives).

Private investors

The one who buys securities is an investor: he actually invests his money in exchange for a promise.

They can also be all participants of the securities market:

• state;
• individuals, legal entities.

According to the legislation, in each specific case (issue or purchase of a certain type of securities) various restrictions are established.

Please note: the same entity can simultaneously be an issuer and investor.

Professional members

Professional participants provide intermediary services (important: have a license). It:

• registrars (register release);
• depositories (main functions: accounting of rights, storage of certificates);
• clearing organization (control of obligations);
• dealers (make their own decisions, risk their own means);
• brokers (working at the direction of customers at their expense);
• investment funds (the main ones are investment account managers);
• exchange
• analytical agencies.

There is a nuance: if someone calls himself a professional participant, offers services, but does not have a license, this is a crook. To get a document, you need to meet the requirements (work experience, amount of work in monetary terms, education, compliance with quality standards).

Supervisory authorities

The state has the exclusive right to control work. At different times, control functions were performed by various commissions. Since 2013, the Bank of Russia has been the regulator of activities.

There is also a market self-regulation system (SRO). Associations:

• NAUFOR (for participants in the stock organized market);
• PARTAD (for registrars, transfer agents and depositories);
• Auver (for the bill market).

They develop standards, monitor compliance, and resolve disputes. A professional participant must be a member of NAUFOR or PARTAD.

Conclusion

The functioning of the securities market is impossible without professionals serving it and solving emerging problems. The Federal Law “On the Securities Market” stipulates that “professional participants in the securities market are legal entities, including credit organizations, as well as citizens (individuals) registered as entrepreneurs who can carry out the following activities in the market valuable papers:

Brokerage activity;

Dealer activity;

Securities management activities;

Clearing activities;

Depository activities;

Maintaining the register of securities owners;

Organization of trade in the securities market.

The main professionals in the securities market are:

1) brokers (intermediaries in transactions that are not themselves involved in them);

2) dealers (intermediaries involved in transactions with their capital);

3) managers (persons disposing of securities transferred to them for trust management);

4) clearing (organizations engaged in determining mutual obligations);

5) depositories (provide services for the storage of securities);

6) registrars (keep registers of securities);

7) organizers of trading on the securities market (provide services that facilitate the conclusion of transactions with securities);

8) jobbers (specialists in the securities market).
  For activities in the securities market, a broker or brokerage organization must meet the following qualification requirements:

Have staff who have qualification certificates;

Possess the established minimum equity required for liability to investors;

To have a developed accounting and reporting system that accurately and fully reflects operations with securities. It is the responsibility of the broker to faithfully carry out client orders. He should put the interests of clients in the first place and fulfill them in the order of receipt.

The broker receives the main income from the commission charged on the transaction amount. Therefore, the broker's task is to have clients, among whom would be both suppliers of securities, and their buyers, owners of temporarily free cash.

So, having examined broker activity in more detail, you can formulate a number of rules that guide the broker, making its operations:

The client enters into a contract with a brokerage firm, which stipulates all types of instructions, including where to buy securities (on the stock exchange or on the OTC market);

The broker acts within the amount determined by the client, usually retaining the right to choose securities in accordance with the installation he received;

The client may order the broker to terminate all transactions entrusted to him;

Having executed the order, the broker is obliged to notify the client about this within the time period specified in the contract and transfer to him the funds received from the sale of securities (net of commissions);

The transaction must be registered by the broker in a special book, and the client has the right to demand an extract from it.

2. Dealersmake transactions of purchase and sale of securities on their own behalf and at their own expense by publicly announcing the purchase and (or) sale prices of certain securities with the obligation to purchase and (or) selling these securities at the declared prices, carrying out such activities, by a person. A dealer can only be a legal entity that is a commercial organization.

Dealer revenue consists of the difference in sale and purchase prices. Therefore, the dealer must constantly monitor and take into account the changing market conditions. He usually specializes in certain types of securities, but large organizations can serve the securities market as a whole.

Acting as a market operator, the dealer announces the sale and purchase price, the minimum and maximum number of purchased and (or) sold securities, as well as the period during which the announced prices are valid.

Dealers in the securities market perform the following main features:

Provide information on the issue of securities, their rates and quality;

They act as agents that fulfill customer orders (sometimes they involve brokers for this purpose);

Monitor the state of the securities market; in cases when the activity of purchase and sale is reduced (as a result of a lack of sellers or buyers), dealers at their own expense perform the necessary operations to equalize the rate of securities;

They give an impetus to the development of the securities market, bringing buyers and sellers together (act as catalysts for the market).

3. One of the professional participants in the securities market may be management companies   regardless of the specific legal form of their organization, but having a state license for securities management activities.

Securities management activities include:

Management of securities transferred by their owners to the relevant company;

Managing clients' funds intended for profitable investment in securities;

Management of securities and cash that companies receive in the course of their activities in the securities market.

4. Transactions with securities are accompanied not only by their transfer from one owner to another or by the transfer of ownership of them from registrars or depositories, but also by the opposite direction of transfer of money for these securities from their buyer to the seller. If we are talking about one-time or few transactions, then settlements on them are carried out in the usual way, as with transactions of sale of other goods.

Settlement and clearing organizations carry out settlement and clearing activities, which, in particular, includes:

Settlement operations between members of a clearing and settlement organization (and, in some cases, other participants in the stock market);

Set-off of mutual claims between settlement participants, or clearing;

Collection, reconciliation and adjustment of information on transactions completed in the markets that are served by this organization.

In practice, these organizations may have such names as the Clearing House, the Clearing House, the Clearing Center, the Settlement Center. In the most general terms, a clearing and settlement organization is a specialized banking type organization that provides settlement services to participants in the organized securities market. Its main goals are:

Maximum cost reduction for settlement services for market participants;

Reduced calculation time;

Reduction to a minimum level of all types of risks that occur in the calculations.

In order to reduce the risks of non-execution of transactions with securities, the clearing and settlement organization is obliged to form special funds. The minimum size of special funds of settlement and clearing organizations is established by the Federal Commission for the Securities Market in agreement with the Central Bank of the Russian Federation.

A clearing and settlement organization usually exists in the same legal forms as commercial banks, but more often in the form of a closed joint stock company, and must be licensed by the Central Bank of the countries to service all types of settlement transactions in the corresponding securities market.

Settlement and clearing organization is a commercial organization that must operate profitably. Its authorized capital is formed by contributions of its members. The main sources of income consist of:

Fee for registration of transactions;

Income from the sale of information;

Income from the circulation of funds held by the organization;

Proceeds from the sale of their calculation technologies, software;

Other income.

5. Depositories   are organizations that provide services for the storage of securities certificates or accounting for property rights to securities, i.e. the depository maintains accounts on which securities transferred by customers for storage are recorded, and also directly stores certificates of these securities. Only a legal entity can be a depositary.

The custody agreement must contain the following essential conditions:

a) unambiguous definition of the subject of the contract: provision
  services for the storage of securities certificates and / or accounting
  rights to securities;

b) the procedure for the transfer by the depositor to the depositary of information on the disposal of securities deposited in the depositary
  depositor;

c) the duration of the contract;

d) the amount and procedure for payment of depository services provided for
  an agreement;

e) the form and frequency of reporting by the depository to the depositor;

e) obligations of the depositary.

6.   Registrars   keep a register of holders of securities, conduct
  collection, fixing, processing, storage and provision of data that make up the system of maintaining the register of securities owners. Only legal entities may engage in registry maintenance activities
  persons who do not have the right to engage in valuable transactions themselves
  papers.

Holders and nominee holders of securities are required to comply with the rules for submitting information to the registry system. The register holder may be the issuer or a professional participant in the securities market, acting on the basis of the issuer's order. If the number of owners exceeds 500, the registrar should be an independent specialized organization, which is a professional participant in the securities market and carries out registry maintenance activities.

The registry maintenance agreement is concluded with only one legal entity, which is the registrar. A registry maintenance agreement is concluded between the registrar and the issuer, which provides for payment for the work performed. For its part, the registrar may keep registers of securities owners of an unlimited number of issuers.

The registrar's main duty is to provide the register to the issuer in a timely manner. Another responsibility of the registrar, which is closely related to the main one, is to maintain personal accounts of holders of securities and nominal holders of accounts, which upon documentless issue certify ownership of the securities. As a rule, the registrar’s activities combine two main responsibilities - to compile registers for the issuer and take into account the ownership rights of investors in securities.

7. Trade organizers   in the securities market provide
  services directly contributing to the conclusion of civil transactions. They are required to disclose the following information to any interested party:

Rules for admission to trading of securities participants;

Rules for admission to trading in securities;

Rules for concluding and reconciling transactions;

Rules for registering transactions;

The order of execution of transactions;

Rules restricting price manipulation;

Schedule for the provision of services by the organizer of trading in the securities market;

The procedure for making changes and additions to the above information;

List of securities admitted to trading.

8. As professional participants in the securities market may act jobbers   - Advisers on the problems of the securities market, which first appeared in the City of London. Their activity was required in connection with the constant expansion of the scale and structure of the securities market, the complication of operations in this market. In depositories and other storage places there is a huge amount of securities issued by various issuers at different times and endowed with dissimilar properties. Jobbers are needed not only to correctly assess the investment qualities of already issued securities, but also to help issuers to carry out their new issues. They not only provide one-time consultations, but also solve complex problems of the securities market (make forecasts of changes in stock prices, determine the prospects for the development of individual sectors of the economy, analyze tax policy). To do this, they create temporary research teams from among economists, banking workers and other specialists.

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Section 5. Securities and the stock market

Theme 5.1. Securities market, its importance, basic concepts. Securities

Stocks and bods market -it is the economic relationship between market participants regarding the issue and circulation of securities.

The securities market is an integral part of the financial market, in which there is a redistribution of funds using financial instruments such as securities.

Security paper- This is a document of the established form and details certifying property rights, the exercise or transfer of which is possible only upon presentation. The vast majority of securities exist in paperless or paperless form.

The securities market is in constant development in accordance with the growth of the global economy. Its appearance was associated with the needs of commodity production. Without attracting private capital and combining it with the help of issuing, first of all, shares and bonds, it would be impossible to create and develop new enterprises and sectors of the economy. Therefore, the development of the securities market has become an important condition for the development of the economy of all the most developed countries in the world.

Within the framework of a commodity economy, the securities market, on the one hand, is similar to the market of any other product, for a security is the same product, and on the other it has its own peculiarities related to the specifics of its product - securities. The securities market in modern conditions is a sector of the general financial market and in this sense differs from the real sector of the economy that produces goods and services.

By object and by volume. Both markets have different objects of transactions: the first one has a security, that is, the possibility of generating income in the future, and the second one has goods and services to be consumed. The volume of the securities market, due to their continuous turnover, is much larger than the volume of the market for real goods and grows much faster than it;

By the method of market formation. Real goods must be produced, and the security is simply put into circulation; Previously, for this it was necessary to at least print the forms of the security itself, and now it is enough to register all its owners in a special register

By the role of the appeal process. The purpose of production of a real product is its productive or personal consumption. The circulation process is only necessary in order to deliver the goods from the manufacturer to the consumer. The number of stages of the circulation of goods is limited and the fewer they are, the better. A security, on the contrary, exists only in the process of circulation. The number of acts of transferring it from hand to hand is unlimited and can be very large. The velocity of a security is the most important indicator of its “quality”. Termination of the circulation process means “death” for a security;

By subordination of compared sectors of the economy. Since the real sector is the basis of the economy, so far it ultimately determines the development of the securities market.

Stocks and bods market   - This is a sector of the financial market where the purchase and sale of financial values \u200b\u200b(securities) is made.

The securities market covers:

International, national and regional markets,

Markets of government and non-government (corporate) securities

Primary (source) and secondary, or derivative securities.

Stocks and bods market:

On the one hand, there is an integral part of the financial market, as it allows the use of securities to accumulate, concentrate and centralize capital and, on this basis, their redistribution in accordance with market requirements.

On the other hand, this is a sphere of capital growth, like any other market.

The securities market is an external source of raising capital in relation to any commercial activity. Typically, the internal financial sources of the work of an enterprise or company, consisting mainly of depreciation and reinvested part of net profit, make up on average from half to three quarters of the total financial resources needed to maintain and expand production and circulation of goods.

To get money from the sale of securities, you need to find a buyer on them. capital can be increased:

Putting money on a bank deposit

In the foreign exchange market

Invest in real estate or antiques, etc.

Investing in some kind of productive activity

Consequently, the securities market is at the same time an object for investing free cash of enterprises, organizations and the population as a sphere where capital increases.

Criteria for the attractiveness of the securities market for the investor. The attractiveness of the securities market is evaluated by the following criteria:

Rate of return. Market participants compare the profitability of their investments in various markets and their instruments;

Terms of taxation. Market participants consider the conditions for taxation of transactions with securities in comparison with taxation that occurs in other markets;

The level of risk of investments in securities, i.e., the safety of funds accumulated in them and income received;

The level of service in the market. How convenient, simple, reliable, etc. is an investor working in a given market, how well are its participants protected from all kinds of market and non-market risks, etc.

In general, approximately 25-30% of the free cash of the population is directly invested in the securities market in developed countries and approximately the same amount is indirectly mediated through insurance and pension funds (companies), which hold most of their assets in securities.

The securities market has a complex structure

Primary and secondary

Organized and unorganized

Exchange and OTC

Public and computerized;

Cash and express

Organized -securities are traded in accordance with established rules.

Unorganized -market participants agree on almost all issues.

Exchange Market -   it is a securities trading organized on stock exchanges.

OTC Market -   it is trading in securities without the intermediary of stock exchanges.

Most types of securities, except for shares, are traded off-exchange. If the stock market in its essence is always an organized market, then the OTC market can be both organized and unorganized (“street”, “spontaneous”). Currently, in countries with developed market economies, there is only an organized securities market, which is represented either by stock exchanges or over-the-counter electronic trading systems.

Depending on the type of trading, the securities market:

Public(voice) market is a traditional form of securities trading, in which sellers and buyers of securities (usually represented by stock intermediaries) directly meet in a certain place where there is a public, public auction (as in the case of exchange trading), or closed trading negotiations that for some reason are not widely publicized.

Computerized   the market is a variety of forms of securities trading based on the use of computer networks and modern means of communication.

A computerized market is characterized by:

Lack of a public nature of the pricing process, automation of the securities trading process;

Lack of a physical meeting place for sellers and buyers; computerized trading places are located directly in the offices of securities trading companies or directly at their sellers and buyers;

Continuity in time and space of the securities trading process.

Depending on the terms for which transactions with securities are concluded, the securities market is divided into:

Cash market   (spot market, cache market) is a market for the immediate execution of transactions. At the same time, purely technically this performance can be extended for a period of one to three days, if delivery of the security itself in physical form is required.

Urgent   A securities market is a market with a delayed, usually several weeks or months, execution of a transaction.

Depending on the instruments traded in the market, it is divided into:

Monetary   - the term of circulation of instruments in this market is not more than one year (bill of exchange, check, bank certificate, short-term bonds);

Capital market   (investment market) - the term of circulation of instruments is more than one year (stocks, medium and long-term bonds).

Theme 5.2. Securities Market Participants

The securities market (stock market) is a part of the financial market along with markets such as loan capital market, foreign exchange market and commodity market. This is a market in which they trade a specific product - securities.

An efficiently working securities market performs an important macroeconomic function, facilitating the redistribution of free resources, ensuring their concentration in the most profitable and promising sectors of the economy and enterprises.

For the functioning of the market, supply and demand, intermediaries, a system of regulation and self-regulation are needed. Demand is formed by investors - organizations and individuals who have free cash savings and are ready to use them to buy securities. Demand for securities is determined by the welfare of the nation: the higher the standard of living, the greater part of income is saved, the more often, ceteris paribus, people buy securities.

The offer is provided by joint-stock companies issuing shares in order to raise funds to finance their programs, as well as the state. Both the state and joint stock companies are issuers, i.e. organizations issuing securities. The supply of securities is determined by demand. It is less in those countries where the state intervenes more in production, distribution and exchange.

The mechanism of functioning of the securities market is the interaction of various market entities associated with the implementation of stock transactions. Market participants include stock market participants. Market objects are various types of securities. The interaction of securities market participants is based on the interests of four main market entities:

- state;

- investors (legal entities or individuals) buying securities;

- issuers (legal entities or individuals) issuing securities;

- intermediaries (dealers, brokers, brokers, etc.) that help the circulation of securities and various stock transactions.

The main participants in the securities market are issuers, investors and professional participants.

Issuers   - legal entities or bodies of executive power or bodies of local self-government, bearing on their own behalf obligations to holders of securities to exercise the rights enshrined in them.

Issuers are “producers” of the “securities” product, persons issuing securities and bearing obligations on them in their own name and at their own expense. The issuing activity is not professional; a license is not required for its implementation.

The source of funds for investment is savings, i.e. those funds that were not spent on consumer needs. Investments may come from the state, private individuals, financial institutions and foreign sources. Since the government does not save money specifically to later invest in securities market instruments, the main suppliers of capital are private individuals and financial institutions.

The financial institutions that invest in securities include: banks, pension funds, insurance companies, mutual funds and other professional managers. Banks attract deposits based on the profit from providing these funds on credit at a higher percentage than they pay to depositors.

The mechanism of functioning of the securities market can be described by the following pairs of interactions.

State issuers. The state legislatively determines the procedure for issuing, circulating and recording securities, the taxation system, controls the implementation of laws by market participants and the collection of taxes. The issuer places its securities in accordance with the established rules. Investors are implicit participants in the state-issuer relationship, as the current legislation is aimed at ensuring the rights of investors.

Investor state. The state establishes legislative norms, monitors their implementation and collects taxes. Investors pay taxes, buy and sell securities and require the state to ensure their rights.

Issuers are investors. Issuers place their securities and use the funds raised for business development, while having certain obligations to investors. The interests of issuers in business development and the interests of investors in generating income are opposite. For the functioning of the market, sellers, buyers and intermediaries are needed that represent the interests of sellers and buyers on it.

Thus, the main actors in the securities market are:

1) stock exchanges, stock departments of currency, commodity and commodity exchanges organizing exchange trading in securities;

2) depositories and registrars holding and maintaining the register of securities;

3) self-regulatory organizations that are public associations of professional participants in regional securities markets;

4) joint stock companies issuing securities;

5) investment funds and companies engaged in professional specialized activities for the placement of funds of private investors. Mutual funds, which are collective investment schemes, create an investment mechanism for small investors who believe that they do not have the necessary skills and time in order to independently manage their investments. By combining the funds of many investors, mutual funds can take advantage of economies of scale (i.e., lower commission costs and wider risk diversification by distributing it to a larger number of individual investments, which will be more economically effective than for an individual investor);

6) commercial banks issuing their securities, participating in the stock transactions of other participants in the securities market and serving them;

7) stock centers and shops selling securities;

8) pension funds and insurance companies that invest temporarily free financial resources in securities. Pension funds accept contributions from future retirees, knowing that there is a high probability that they will not have to pay pensions to most of their clients during the first years. Consequently, they can invest for long periods and receive income that they will accumulate and reinvest without feeling the need to maintain cash reserves to cover short-term liabilities.

Insurance companies usually accept insurance policy payments from businesses and individuals on a regular basis. Then they must constantly ensure the availability of a sufficient amount of funds in order to meet, if necessary, obligations under insurance policies. Therefore, insurance companies need to invest surplus assets and cash in order to ensure that they have a sufficient capital base to meet policy obligations and earn an acceptable rate of return for their shareholders;

9) legal entities and individuals, within the framework of the current legislation, performing various stock transactions.

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