What are Securities and Securities Market?

Definition of Securities: Securities are financial instruments that represent a claim on the assets or income of a company or entity. They can be in the form of Equity Shares, Debt Securities, Derivatives, or Mutual Funds.
Types of Securities:
- Equity Shares: Represent ownership in a company, entitling the investor to receive dividends and voting rights.
- Debt Securities: Represent borrowed money that must be repaid with interest, also known as Debentures or Bonds.
- Derivatives: Financial instruments whose value depends on the value of another asset, such as shares, debt securities, or commodities.
- Mutual Funds: A pool of money collected from many investors to invest in securities such as shares, bonds, and other assets.

Securities Market

Definition: A platform where companies can raise funds by issuing securities to investors, and where investors can buy or sell securities.
Primary Function: To enable the allocation of savings from investors to those who need it, contributing to the economic development of the country.
Segments of the Securities Market:
- Primary Market: Where new securities are issued to raise funds, such as through an Initial Public Offer (IPO).
- Secondary Market: Where existing securities are traded, allowing investors to buy or sell securities already offered to the public, with the objective of Capital Appreciation.