Capital Markets Flashcards
Who are the three participants in Capital Markets?
- investors
- issuers (companies, governments)
- intermediaries (banks, brokers, traders)
What are the three main functions of Capital Markets?
- Equity Markets
- Debt Markets
- Regulation
What is an Equity Market?
The primary market of the LSE
Where companies list their shares (equities) and investors buy and sell these shares
What is a Debt Market?
Companies, governments and other institutions can raise funds through the issuance of bonds in the debt market
What is a bond?
When you lend money to the government or a company and they pay you back regularly with interest.
How does the Act relate to Capital raising?
The Act outlines procedures, rules and powers related to transfer of shares which is the function for raising capital
How does the Act relate to Corporate Governance?
Provides framework for shareholder rights (e.g. voting rights, right to dividends). Also takeovers and mergers
Why is disclosure so important in Capital Markets
Provides transparency so investors can make informed decisions
How does the Act relate to Capital Structures and financing?
The Act addresses changes to share capital, capital reductions (redeem/cancel shares) and issuance of new securities
How does the Act relate to Debt financing?
Deals with company’s borrowing money through issuance of debentures or bonds
