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WEEK 2
TOPIC: REGULATION OF THE CAPITAL MARKET
CONTENTS:
- Meaning of capital market
- Reasons for capital market regulation
- Types of regulation
- Stock Exchange Market
SUB-TOPIC 1:
Capital Market
A capital market is a market for securities (debt or equity), where business enterprises and governments can raise long –term funds.
It is defined as a market in which money is provided for periods longer than a year. The capital market includes the stock market (equity securities) and the bond market (debt).
Capital Market Regulator:
Securities and Exchange Commission (SEC): This is the body that oversees the capital markets to ensure that investors are protected against fraud, among other duties.
Regulation is the activities of government –established regulatory agencies to control monitor and supervise the operations of the capital market. In Nigeria, SEC is directly vested with this power of regulation.
Classification of Capital Market
- Primary market
- Secondary market
Primary market: This is where new stock or bond issues are sold to investors through a mechanism known as underwriting.
Secondary Market: This is where existing securities are sold and bought among investors or traders, usually on a security exchange, over the counter or elsewhere.
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