SS2 Second Term Financial Accounting Lesson Note – Financial System

The content is just an excerpt from the complete note for SS2 Second Term Financial Accounting Lesson Note – Financial System. Check below to download the complete DOCUMENT

WEEK 6

TOPIC:  Financial System (a) Financial system (i) Meaning (ii) Components of financial system; e.g., NSE, SEC, CSCS, etc. (b) Money Market (i) Definition (ii) Key functions (iii) Market institution (iv) Features of money market (Short term).

CONTENT:

1. Financial system
2. Money market

Sub-topic 1: Financial system (i) Meaning (ii) Components of financial system; e.g., NSE, SEC, CSCS, etc.

Meaning

A financial system is a complex network that includes receipt and payment mechanisms and lending as well as borrowing funds. It consists of markets, market participants, instruments and institutions that are meant to facilitate transfer of resources from one unit to another. In a nutshell, a financial system is made up of financial markets, financial instruments and financial institutions, and its main function is to mobilize funds from surplus spending units (savers) and channel them to the deficit spending units (investors or users) for more profitable economic activities.

Components of financial system; e.g. NSE, SEC, CSCS, etc.

Apart from the Central Bank of Nigeria (CBN) that oversees the overall financial system of the country, the major institutions in the Nigerian capital market include; the Securities and Exchange (SEC), the Nigerian Stock Exchange (NSE) , Issuing Houses, Share Registrars, Unit Trusts, and Stock Brokerage Firms.

The Nigerian Stock Exchange (NSE)

The Nigerian Stock Exchange (NSE) or capital issues commission as it was previously called was established by the Securities and Exchange Commission Decree No. 71 of 1979. It is the apex regulatory organ of the capital market.

Functions

To gain full access to the note: DOWNLOAD FILE