Course of lectures on the discipline “Securities Market”. Thematic plan of lectures for the course Securities Market. Lecture notes on the academic discipline "securities market" Securities market lecture notes
Topic 1. The securities market as an alternative source of financing the economy
The securities market is a system of relations that arise during the issue and circulation of securities, as well as during the creation and functioning of professional participants in the securities market.
The securities market is a market where the object of trading is securities.
RCB is part financial market, on which redistribution occurs financial resources through securities. This part of the financial market is called the stock market. In addition, the RCB covers a number of relations in the following areas:
— commodity markets: commodity securities (commodity bills, bills of lading, warrants), futures contracts on commodity exchanges;
— monetary circulation: cash securities (checks).
Functions of the RCB:
Pricing;
Informational;
Regulatory;
Commercial 9profit making).
Redistributive;
Insurance and risk redistribution.
General market:
Specific:
Topic 2. Essence and types of securities
Securities originated in the Middle Ages. Reasons for the emergence of securities:
Registered undocumented.
Documentary to bearer.
A promissory note (solo bill) is an obligation of the drawer to pay the holder a certain amount.
Sellers
Investors
Stock intermediaries
Organizations servicing securities market
Regulatory and control bodies
Brokerage activities
Dealer activity
Securities management activities
Clearing activities
Depository activities
Register maintenance activities
Trade organization activities
Activities of a financial consultant.
Maintaining order in the market.
Protection of participants from unfair competition.
Ensuring free pricing.
Protecting public interests.
Creation of new tools and markets.
General market
Entering orders into the exchange system;
Concluding transactions during trading;
Verification of transaction parameters;
Mutual settlements;
Execution of the transaction.
Transactions with real goods:
Transactions without real goods.
Call option, buyer option – an option that gives the right to buy an asset;
Put option, seller's option - an option that gives the right to sell an asset;
A double option is an option that gives you the right to choose between buying and selling.
The owner of the capital must have written evidence of the investment of capital.
The owner of capital must be able to freely dispose of it at any time.
Securities have 2 aspects:
Legal. A security is a document of the established form and details that certifies property rights, the exercise or transfer of which is possible upon presentation.
Economic. A security is a representative of real capital. However, these representatives have separated from real capital and function independently, becoming fictitious capital. As a result, the security circulates independently on the market, becomes cheaper, rises in price, but the real capital does not change.
Securities have the following fundamental properties:
Tradability is the ability of a security to be bought and sold on the market, as well as to act as a payment instrument.
Availability for all civil transactions: purchase and sale, pledge, donation, storage, commission, commission
Standard. Each security has a certain standard form and set of details. They are necessary to identify a document as a security, as well as to facilitate and automate work with securities. Standardization also implies uniform rights for all owners.
Seriality. Securities are issued in certain series, tranches, issues, issues.
Documentation. A security is a strict document because it formally asserts the rights of the owner and the obligations of the issuer.
Mandatory performance.
In the market, securities are valued according to the following qualities:
1. Profitability. Any security is purchased to generate income in one form or another.
2. Riskiness. Receiving income from securities is probabilistic in nature.
3. Liquidity. This is the ability of a security to turn into cash. There are direct and credit liquidity.
The life cycle of a security includes the following phases:
Pre-market phase. Includes the design of securities, development of issue documents, state registration and assignment of a state registration number.
Market phase. Includes:
— primary placement or underwriting. At this stage, the issuer sells the securities to the first owner. The placement price is constant. In the Russian Federation there is a ban on the placement of securities at a price below par. Discount bonds (government bonds) are sold at a discount.
- secondary appeal. At this stage, the security passes from one investor to another. The issuer does not receive any funds. The price changes depending on the relationship between supply and demand. The owner is paid interest income.
3. Post-market phase. The securities are redeemed. The owner is paid the face or salvage value.
Securities can be classified according to the following criteria:
| Sign |
Kinds |
|
Primary Derivatives |
|
|
Debt Title |
|
|
Short term Long-term Indefinite Poste restante |
|
| By issuer |
State Non-state (private and corporate) |
| By transmission method |
To bearer. They do not bear the owner's name and are transferred by simple transfer Warrants. The name of the owner is indicated on them, and ownership of them is transferred by means of an endorsement. Named. The name of the owner is indicated on them, ownership of them is transferred by making changes to the register |
| By release form |
Documentary Undocumented |
|
Market or freely tradable Non-market |
|
| Based on availability of collateral |
Secured Unsecured |
|
Reviews Irrevocable |
|
| According to the form of paid income |
Interest-free Interest |
|
Emission Non-emission |
|
|
Investment Speculative |
|
| By type |
Stock Bonds Bill of exchange |
A share is an issue-grade security issued by a joint-stock company, which assigns the following rights to the owner:
The right to receive part of the JSC's profit in the form of dividends.
The right to participate in the management of a joint stock company.
The right to receive part of the JSC's property remaining after its liquidation.
Properties of shares:
- is a title of property, that is, its holder is a co-owner of the joint-stock company;
- is unlimited;
- implies limited liability for the owner within the limits of the purchase price.
According to Russian legislation, shares are registered securities and must be issued in book-entry form (with rare exceptions).
Share classification:
|
Sign |
View |
|
Type of JSC |
JSC shares – they can be subject to open or closed subscription, open sale CJSC shares can only be distributed among the founders or other limited circle of persons; they cannot be subject to public subscription; shareholders have the right of first refusal. |
|
By scope of rights |
Ordinary – give full rights Preferred (preferential) - do not give the right to vote, however, the size of the dividend and liquidation value are fixed in the charter. Can be issued within 25% of the authorized capital. |
|
By placement |
Placed, acquired by shareholders Announced and may be further released |
A bond is an issue-grade security that assigns the following rights to the owner:
The right to receive from the issuer within the prescribed period its nominal value or other property equivalent.
The right to receive a fixed percentage of the nominal value.
Other property rights.
Bond properties:
— certifies the loan relationship and does not give the right to interfere in the affairs of the issuer and manage property;
- has a final maturity;
- has priority over shares.
Bond classification:
|
Sign |
View |
|
Release form according to the legislation of the Russian Federation |
|
|
Based on availability of collateral |
Without collateral With security (pledge, surety, bank guarantee, state or municipal guarantee) |
Stocks and bonds have the following advantages and disadvantages:
|
Type of security |
Issuer |
Investor |
||
|
pros |
Minuses |
pros |
Minuses |
|
|
Ordinary share |
— the dividend is set arbitrarily |
— the shareholder has the right to manage |
- right to part of the property — the possibility of share price growth - additional benefits |
— dividend is not guaranteed — the right to property during liquidation is realized last of all — for real management you need a large block of shares |
|
Preference share |
- it is not necessary to return capital |
— dividend is fixed |
— dividend guaranteed — shareholder rights are exercised after the rights of the bond owner are exercised |
- low dividend amount — the shareholder does not have the right to manage |
|
Bond |
- capital must be returned — the percentage is fixed |
— coupon size is usually guaranteed — upon liquidation of a JSC, the owner’s rights are exercised first |
- the owner does not have the right to manage |
|
Secondary securities are certificates of property rights to underlying securities or other secondary securities.
Causes:
The presence of rights in the owner of the underlying security that can be separated from the underlying security and exist independently in a more effective form.
Promotion investment qualities existing securities.
Convertible securities are securities of one type that, under certain conditions, can be converted into securities of another type. The following are produced in the Russian Federation:
Convertible bonds that can be exchanged for shares.
Convertible shares, which can be converted into ordinary shares or preference shares other types at the request of the owner.
Another group of derivative securities includes securities that give the right to purchase the issuer's securities. In the Russian Federation, issuer options are allowed.
An issuer's option is an issue-grade security that secures the right of its owner to purchase, within the period specified in it or upon the occurrence of certain conditions, a certain number of shares of the issuer at a price specified in the issuer's option.
On the securities market, futures contracts for the purchase of securities or other assets are widely used. This is a contract in which one party sells and the other buys securities or other assets at a specified date in the future at a price fixed at the time the contract is entered into.
A bill of exchange is a security that certifies the unconditional obligation of the person specified in it to pay upon the arrival of a certain period of time the amount of money specified in the bill of exchange to the owner of the bill.
Properties of the bill:
— abstractness;
- indisputability and unconditionality;
— monetary nature of the obligation;
- written standard form;
- joint responsibility;
- can be transferred using an endorsement (endorsement).
Classification of bills:
A bill of exchange (draft) is an order from the drawer to the payer to pay an amount of money.
Depository and savings certificates– these are securities that certify a deposit has been made to a bank and give their owner the right to receive the deposited amount, as well as interest on it. Certificates of deposit are placed among legal entities, savings certificates - among individuals.
Securitization of private debts is the issuance of securities against issued loans and other debt obligations and their placement on the securities market. This makes it possible to attract additional sources of capital.
Secondary mortgages are securities issued on the basis of homogeneous mortgage loans, entitlement to a proportionate payment of interest and principal on the entire pool of mortgages.
Secondary bonds may be issued.
Issuers often raise capital on international securities markets. The main reasons are:
— obtaining capital;
— increasing the attractiveness of the company;
— creating opportunities for foreign investors to trade securities.
Ways to enter the international market:
Use of ordinary securities directly or through an intermediary.
Issue of international securities.
Issue of derivative securities.
International securities are securities placed on international markets.
Classification of international securities:
Euroshares and Eurobonds are securities placed on European markets, that is, issued in a currency that is foreign to both the issuer and the investor.
Foreign bonds are bonds issued and placed by the issuer in a foreign country in the currency of that state.
Global bonds are a simultaneous placement on the Eurobond market and national markets
Parallel bonds are the placement of one issue of securities simultaneously in several countries in national currencies
When using derivative securities, depository receipts are used.
A depositary receipt is a security issued in country A and indicating the ownership of a certain number of shares of a company located in country B, deposited in that country.
Topic 3. Structure of the securities market
The securities market has a complex structure. The following segments can be distinguished in the market:
|
Sign |
Segments |
|
Security life cycle stage |
Primary is the part of the securities market that ensures the release of a security into circulation and its transfer to the first owner Secondary is the part of the securities market on which previously issued securities are traded |
|
Degree of regulation |
Disorganized Organized |
|
Place of trade |
Exchange OTC |
|
Trade type |
Traditional - a form of securities trading in which the seller and buyer directly meet in a certain place and conduct public or closed trading and negotiations Computerized is a form of securities trading that uses various computer networks and modern means of communication. Such a market does not have a physical location and is characterized by continuity in time and space. |
|
Transaction deadlines |
Cash market (spot, cash) Urgent |
Participants of the Securities Exchange are individuals and legal entities who sell or buy securities, service their turnover and settlements on transactions with securities.
Groups of participants:
The seller of a security may be the issuer and the owner or investor of the security.
An issuer is a person who, on its own behalf, bears obligations to the owners of securities to exercise the rights secured by these securities.
According to the legislation of the Russian Federation, issuers can be:
Legal entities
Organs executive power
Organs local government
An investor (owner) is a person to whom a security belongs by right of ownership or other proprietary right.
Investor classification:
|
Sign |
Kinds |
|
Status |
Individuals: private investors and professional participants Corporate investors: JSC Collective investors: mutual funds, non-state pension funds, insurance companies State |
|
Risk level |
Conservative Moderate Aggressive Irrational |
Stock intermediaries and organizations servicing the securities market are mainly professional participants of the securities market. In the Russian Federation, professional activities include:
Stock intermediaries:
Organizations servicing the securities market:
In addition, various information agencies, rating agencies, law firms and other operating structures operate at the RCB.
Brokerage activity is the activity of carrying out civil transactions with securities on behalf and at the expense of the client or on one’s own behalf, but at the expense of the client.
In this case, a compensation agreement is concluded with the client.
The client can be any person, including the issuer when placing securities.
Brokers' income includes:
- Commission;
— interest received from storing balances in client bank accounts.
Requirements for a broker:
Customer transactions must be executed in the order they are received;
Client transactions have priority over dealer transactions of the broker himself;
Clients' funds are stored in special brokerage accounts at the bank;
Client funds can be used for the benefit of the broker only with the client's permission.
The broker may provide loans to clients to make margin transactions. At the same time he receives interest.
Dealing activity is the execution of transactions for the purchase and sale of securities on one’s own behalf and at one’s own expense by publicly announcing the purchase and/or sale price with the obligation to buy and sell at the announced prices.
The dealer's income consists of the difference between the sale and purchase prices.
Securities management activities are activities carried out by a legal entity on its own behalf for a fee for a certain period of time. trust management securities and funds transferred to him into possession and belonging to another person in the interests of this person or third parties indicated by him.
As in brokerage activities, a conflict of interest arises in this case.
Clearing activity is the activity of determining mutual obligations and their offset in transactions for the supply of securities and settlements on them.
Clearing activities include: collection, reconciliation, adjustment of information on transactions and preparation of accounting documents.
The reason for the clearing activity: a large number of participants in transactions and a large number of transactions concluded.
Principles of clearing activities:
Clearing and settlement must be carried out by an independent entity.
Funds of exchange intermediaries and clients must be accounted for separately.
Exchange transactions are received by the clearing authority only after all details have been verified and registered.
There is a strict time schedule for clearing and settlement.
To guarantee the execution of transactions, the clearing house creates special funds.
Depository activities are the provision of services for the storage of securities certificates, as well as for the accounting and transfer of rights to securities.
Activities related to maintaining the register of securities owners - collecting, recording, processing, storing and providing data that makes up the register maintenance system.
This legal entity is called the registry holder or registrar.
The following may be registered in the register:
1. Owners.
2. Nominal holders are persons registered in the register, but who are not owners of securities. The rights to the securities are not transferred to the nominal holder; he can exercise rights only on behalf of the client.
Activities related to organizing trading on the securities market are the provision of services that directly facilitate the conclusion of various civil transactions with securities.
To streamline the activities of all participants, regulation is carried out by the Securities Market.
Regulatory objectives:
Regulation can be carried out in the following forms:
Government regulation.
Self-regulation.
Signs of a self-regulatory organization:
Voluntariness of the association.
Members are professional participants.
The state transfers part of its functions.
The organization defines rules of conduct only for its members.
The main self-regulatory organizations of the Russian Federation:
National Members Association stock market(NAUFOR).
Professional Association of Registrars, Transfer Agents and Depositories (PARTAD)
Topic 4. Exchange securities market
The market is a relationship regarding the purchase and sale of any property or any rights.
Types of markets:
- unorganized;
- organized.
Signs of an organized market:
— existence of approved trading rules, settlements for transactions and procedures for the delivery of assets;
- existence management organization;
— concentration of supply and demand in time and space;
— market regulation by the state and public organizations.
Classification of organized markets:
|
Sign |
Kinds |
|
By asset type |
— commodity market(products, intellectual property) - financial market (securities market, bank loan market, currency market) |
|
By origin |
— self-organized (at the initiative of the participants) - centralized (at the initiative of the state) |
|
By level of organization |
- poorly organized - organized - highly organized |
|
By form of trade |
- retail — wholesale (exchange and non-exchange) |
2.
Signs of stock trading:
The asset being traded can be either a commodity group or a capital group;
Only purchase and sale transactions can be carried out on the exchange;
Only professional participants of the Securities Market can be participants;
Trade is confined to a specific place and time;
Trading is strictly subject to the rules of exchange trading;
Publicity of the auction (in the presence of all members);
Publicity of trade;
Regulation by state and society;
High concentration of supply and demand;
Formation of market price;
Lack of goods when concluding transactions;
Standardization of the quality and quantity of goods sold.
The exchange is:
an organizer of trading on a specific market (registered securities market, foreign exchange, commodity), meeting certain requirements, namely, conducting open public trading in a predetermined place, at a specific time and according to established rules among a certain circle of persons;
wholesale market, organized in the form of an organization of traders;
Exchange functions:
— price (determination of the market price and its market regulation);
— prognostic (price forecasting);
— informational;
— organizational (organization of exchange meetings, development of exchange contracts);
- warranty.
Specialized
— hedging;
— arbitration;
- speculative.
3.
Exchanges are classified according to the following criteria:
| Sign |
Kinds |
| By type of asset being traded |
Commodity (commodity and raw materials) Stock Foreign exchange |
| By nature of transactions |
Real commodity exchanges Futures exchanges Options exchanges Mixed exchanges |
| According to the principle of organization |
Public law (state) – France, Belgium, Holland Private law (private) – England, USA Mixed – Continental Europe |
| According to OPF |
Commercial organization (JSC, partnership) Non-profit organization (partnership) |
| By form of participation |
Closed Open |
| By product range |
Universal Specialized |
| By role in the economy |
National International |
4.
The emergence of exchanges is the result of the evolution of various forms of wholesale trade. Stages of development of exchange trading:
Caravan trade.
Fair trade. The time and place of the fairs were clearly marked, and participants were notified in advance of its holding. At fairs, transactions were carried out with real goods with cash payment and deferred payment. Product quality standards and trade rules were developed. There were courts.
The emergence of the first exchanges. In the 16th century, with the development of capitalism, permanent specialized trading centers arose, which began to be called exchanges (translation: “wallet”, “bag”). 1531 - stock exchange in Antwerp (Netherlands), 1549 - stock exchanges in Lyon and Toulouse (France), 1556 - stock exchange in London (Great Britain). The first exchanges were exchanges for real goods.
With an increase in trade turnover, the movement of the entire commodity mass through the exchange becomes impossible. In the mid-19th century, the commodity disappeared from exchange trading. Currency and stock exchanges branch off from commodity exchanges. Futures trading emerges. The exchange becomes the center for pricing and risk insurance.
20th century. Increasing number of instruments and their complexity. The emergence of electronic exchanges using computer networks.
History of the emergence of exchanges in the Russian Federation:
1988-1989 With the advent of market relations and the existence of shortages, an auction system for trading raw materials appears.
1990-1991 The first exchanges appear. By the end of 1991, the Russian Federation took first place in the number of exchanges per capita.
1993 As a result economic downturn, the concentration of resources in large companies, the ruin of small stockbrokers, the number of exchanges is reduced.
An exchange transaction is a mutual agreement on the transfer of rights and obligations in relation to an exchange commodity, which is reached by exchange trading participants during trading, registered on the exchange in the prescribed manner and reflected in the exchange agreement.
An exchange transaction has the following aspects:
Organizational – this is the order of actions of the participants, the documents used, necessary for concluding a transaction;
Economic – exchange transactions are aimed at making a profit, so when concluding it is necessary to take into account their effectiveness;
Legal – rights and obligations of the parties, their responsibilities;
Ethical – public attitude towards transactions.
An exchange transaction has the following parameters:
— object of the transaction;
— transaction volume;
— transaction price;
— deadline for execution of the transaction (delivery and acceptance period of the object of the transaction);
— settlement period.
Stages of making an exchange transaction:
Classification of exchange transactions:
|
Sign |
Kinds |
|
Method of conclusion |
Approved - concluded in written, electronic form, have mutual agreement on terms. Parameter verification is not required for them; Unapproved - concluded orally, by telephone, requiring additional agreement on the terms. |
|
Number of participants |
Dealership – transactions without intermediaries; Brokerage – with intermediaries who represent the interests of the seller and buyer. |
Transactions on currency exchanges are classified:
Cash transactions. Spot transactions are transactions with currency delivery within two business days.
Urgent transactions. The execution period of these transactions does not coincide with the moment of conclusion. Futures transactions are divided into:
Simple forward transactions. These are transactions that are executed in the future at the rate established at the time the transaction was concluded. This exchange rate is called a forward exchange rate and is often set as a premium or discount to the spot rate. These include futures and options.
Swaps. These are transactions that are a combination of several cash and/or forward transactions for the purchase and sale of the same currency.
Transactions on commodity exchanges are classified:
Cash transactions (with immediate delivery). These are transactions made on goods that are in the exchange warehouse or in transit. A purchase and sale agreement is concluded for the goods.
Forward transactions (with a deferred delivery date). They can be made both for goods in stock and for goods that have not yet been produced. The term of such transactions is usually up to 1 year. A delivery agreement is concluded for the goods, under which the seller is obliged to deliver the goods by a certain date, and the buyer is obliged to accept and pay for it. These include: transactions with a pledge for sale, transactions with a pledge for purchase, transactions with a premium (the party that paid the premium can demand either execution or refusal of the transaction), complex (with several counterparties), multiples (one of the counterparties can increase several times the quantity of goods).
Other transactions: barter and others.
Futures.
Options.
Transactions on the stock exchange are classified:
Cash. Executed immediately on the exchange floor, or within 3 days.
Urgent. Usually concluded for up to 3 months.
2.1. By payment terms:
- after a certain number of days;
- for a specific month.
2.2. By execution mechanism
- hard.
One of the characteristics of a product is the delivery time.
A forward contract is an individual agreement between two parties for the delivery of a certain quantity of a commodity of an agreed quality at a certain date in the future at a price agreed upon at the time the contract is concluded.
Thus, a forward contract differs from a cash contract only in the delivery time.
Characteristics of a forward contract:
A forward contract can be concluded for any product that can be delivered with a delay.
A forward contract is individual in nature and is prepared taking into account the requirements of the seller and buyer. This predetermines its disadvantage: a certain time is required to agree on the conditions, and there is no full guarantee of its implementation.
There is no secondary market, or it is underdeveloped. A position can only be liquidated with the consent of the counterparty. Thus, a forward is an unassignable contract that cannot be performed by third parties.
A forward contract is usually entered into for the actual delivery of a commodity. They are often used to insure against unfavorable conditions in the future, but do not allow them to take advantage of favorable conditions.
When entering into a forward to play on price differences, profits and losses are realized after the expiration of the contract, when mutual settlements occur.
Due to the shortcomings of forwards, forwards with a collateral appeared, there is a gradual standardization of forwards and futures appear.
A futures is a standard exchange contract under which one party undertakes to sell, and the other party undertakes to buy, a standard quantity of an exchange commodity of standard quality at a price established at the time the contract is concluded in free exchange trading.
Thus, price is the only variable component.
Completion methods futures contract:
Offset deal. 98% of contracts are liquidated this way. The transaction participant instructs the broker to conclude a reverse transaction. The difference between the value of the contract at the time of conclusion and the time of liquidation constitutes the profit or loss of the participant in the transaction.
Goods supply. May occur in the following forms:
Using a standard delivery mechanism. Most often used. All positions for which offset transactions have not been concluded must be fulfilled by delivery of actual goods. The delivery procedure is determined by the rules of the exchange. 2-3 weeks before the expiration of the contract the delivery period begins. The seller determines when during the delivery period he will provide notice of delivery. This notice is called a notice. Actual delivery occurs 1-2 days after receiving the notice. Thus, to eliminate delivery risk, the speculator must liquidate the contract before the first note day from which the note can be issued. There are two types of notices:
- translatable. Upon receipt, the buyer must accept it; if he does not want execution, then he must sell the contract and transfer the notice. If the contract is not sold within the allotted time, then the note is considered accepted and its holder must take delivery;
- untranslatable. The buyer can sell the contract at any time. Then he pays for 1 day of storage of the goods and issues a new note.
Exchange of a futures contract for a contract for the delivery of real goods. Is an exception. Before the delivery date, the buyer looks for a seller with whom he enters into a contract to fulfill the obligation. This contract stipulates all delivery conditions. The exchange is notified about this.
Alternative delivery procedure. At the end of the trading cycle, the parties agree on other delivery conditions.
Payment in cash. The actual product is not delivered, and the buyer receives an amount of cash equal to the value of the asset that he would have received upon delivery.
An option is a contract in accordance with which one of the parties receives the right to buy or sell in the future an asset at a price established at the time the contract is concluded from the other party, paying a premium for this right.
Option sides:
The buyer of the contract is the party who has the right;
The subscriber or seller of a contract is the party who has the obligation.
Options classification:
|
Sign |
Kinds |
|
Type of law |
|
|
Time of completion |
An American option is an option that can be exercised at any time, including the expiration date; A European option is an option that can only be exercised on a specific date. |
|
Assets |
Commodity option; Currency option; Option on stock values; Option on interest rates; Index option; Futures option |
Topic 5. Organizational mechanism of exchange trading
The exchange is created by decision of its founders. Only professional participants can act as founders of the stock exchange. The exchange usually has the following governing bodies:
The general meeting of exchange members is the supreme body of the exchange.
Advisory board. It is created from representatives of government bodies and securities market experts.
Board of Directors. The RTS is formed of 15 members in three categories: 9 representatives from 15 leading members in terms of trade volume, 4 representatives from regions, 4 any individuals.
The president.
Governing body.
Committees and commissions.
The exchange has the following services:
Executive (functional) divisions are the exchange apparatus that prepares and conducts exchange trading
Specialized are exchange organizations: clearing houses, depositories, warehouses.
Commissions and committees include:
Exchange Council. The advisory body, which reviews draft documents, develops recommendations on trade, listing, delisting, and admission of participants.
Control commission.
Disciplinary Commission.
Arbitration Commission
Information Committee
Quotation committee
Settlement Committee.
Trade Committee
Technical Committee
Legal Committee
Audit Committee.
Committees for the most important trading segments (for futures transactions, for debt instruments).
Only its members can carry out trading operations on the exchange. The status of a member of the exchange is regulated by both national legislation and regulations the exchange itself. Not all individuals may be eligible for membership. For example, in the USA only individual membership is provided, in the Russian RTS trading system - only for legal entities, professional participants in the securities market. Exchange members are divided into several categories:
Full members. They have the right to trade in all sectors of the exchange.
Incomplete members. They have the right to trade only in certain sections. They are often called associate or special members.
Temporary members. These are retail tenants. However, the RTS does not allow transfer of membership.
Admission of individuals and legal entities as members of the exchange is carried out on the basis of a certain procedure at the request of the applicant. The procedure includes the following steps:
Submission of documents. The candidate submits an application in the prescribed form with a number of documents attached. This set includes: constituent documents, financial statements, copies of licenses, questionnaire. The questionnaire contains information about the ownership structure, company structure, management and personnel, information about legal proceedings,
Verification of documents. The availability of a complete package of documents and the applicant’s compliance with the established requirements are checked. In this case, additional information and documents and familiarization with the candidate’s activities may be requested. Comments may be made that must be addressed.
Deciding whether to accept or deny membership. The decision is made by the Board of Directors. The candidate is notified of the decision.
The applicant pays the entry fee, fulfills other established requirements and begins operations on the exchange, receiving a certificate of membership.
Getting started on the stock exchange.
Exchange members have the following basic rights:
— take part in the work of the exchange;
— make various proposals and comments on issues related to the activities of the exchange, its bodies and members;
— use affiliation with the exchange for advertising purposes;
— use data banks, technical means and exchange systems;
— use the services provided by the exchange to its members.
The main responsibilities of exchange members include the following:
— comply with the rules adopted at the exchange, decisions of the exchange bodies;
— comply with accepted principles, rules and standards of professional activity and professional ethics;
— comply with all operational procedures that ensure that the exchange performs the functions of a trade organizer, taking into account the volume of trade organization services received from it;
— provide professional training for their officials and personnel, help them improve their qualifications, send them in the prescribed manner for training and passing examinations (certifications) with the receipt of qualification certificates in the established form;
— timely provide information, the composition of which is determined by the exchange documents;
— to prevent cases of abuse of affiliation with the exchange and dishonest behavior;
— pay membership and other fees and payments.
All exchange members pay fees, which are divided into two types:
- introductory
- regular (annual or monthly).
Exclusion from exchange membership occurs in the following cases:
- voluntary renunciation of membership,
- exception in case of cancellation of licenses of a professional participant in the securities market, non-payment of membership fees or other mandatory regular or one-time contributions or payments, failure to comply with the requirements of exchange documents.
Exchange members must strictly comply with the following requirements:
a) financial requirements;
b) professional and qualification requirements to managers and specialists;
c) organizational and technical requirements;
d) special requirements.
Trade organizers, as well as self-regulatory organizations, develop codes of professional ethics and integrity, which determine the minimum requirements for the activities of participants, as well as disciplinary codes.
Professional ethics are the norms, rules, standards of moral and moral behavior of a participant in exchange trading as a professional participant in the securities market in his relationships with other members, exchanges, clients and other persons. Principles of professional ethics:
- partnership,
- responsibility,
- openness,
— mutual understanding in professional activities.
Standards of professional ethics include:
Transparency and publicity of norms. Exchange members promote the development of high standards of professional ethics and integrity, and strive to make them known to interested parties as widely as possible.
Independence of exchange members. When carrying out professional activities, exchange members must proceed from an objective consideration of emerging problems and assessment of facts, and avoid bias, pressure from third parties or dependence on them, which is detrimental to clients. If a conflict of interest arises, other persons must be made aware. Conflicts of interest are conditions that in any way affect the independence of a member of the exchange, and this, in turn, affects the interests of its client or may otherwise affect relations with other persons. A conflict of interest arises in the following cases:
— financial participation of an exchange member in the affairs of these persons;
— direct or indirect participation of an exchange member in the establishment or activities of these persons;
— financial and/or other property dependence of the named persons on each other;
— participation of officials of these persons in each other’s governing bodies;
- other factors depending on the situation.
The performance by a member of the exchange of services not related to professional activities for clients or the existence of formal or actual relations between them that are not related to such activities should not interfere with the implementation of professional activities and violate the law.
Compliance with laws. Exchange members, guided by the interests of the client when carrying out professional activities, are obliged to:
— strictly comply with the requirements of the law, stop any falsifications in order to evade clients from paying taxes;
— strictly comply with tax laws, do not hide income from taxation, and also take measures to prevent other violations of the law;
- has the right to give recommendations to its clients regarding the possibilities of applying current legislation. They must be provided to clients in writing and cannot contain unfounded conclusions, any kind of promises on the part of the exchange member regarding the latter’s solution to the client’s problems, including regarding taxation, obtaining a guaranteed amount of income;
— notify clients of liability for non-compliance with tax legislation, including incorrect preparation and content of tax returns.
Cooperation of exchange members. Exchange members are obliged to:
— treat each other responsibly and kindly, as well as other participants in the securities market;
- refrain from unfounded criticism of each other, public discussion of the activities of other members and other similar actions that cause damage and undermine reputation;
- if a client of one member is also a client of another member, then they do not have the right to carry out any actions to discredit each other, put pressure on the client or discriminate against him;
- has the right to attract, in the interests of its client and with his consent, other members to provide professional services, who bear full responsibility to the client for their actions, unless otherwise agreed in advance or provided for by law or exchange documents. Exchange members and their staff, who are additionally hired to provide services on the securities market, cannot discuss with the client the business and professional qualities of the exchange member who invited them to provide services.
- are obliged to take all measures within their power for the peaceful resolution of disputes, to monitor the implementation accepted obligations, if violations are detected on the part of counterparties, notify them of such violations within a reasonable time.
Interaction of members with the exchange and its bodies. The exchange sets the rules, and exchange members undertake to comply with them. Exchange members are required to maintain close cooperation by:
a) mutual information exchange;
b) using the capabilities of the functional bodies of the exchange;
c) obtaining information about the securities market;
d) use of conciliation procedures and mechanisms for resolving conflict situations;
d) other forms.
Types of penalties for violating the rules:
Warning;
Warning with public notice;
Fine;
Suspension for a certain period of access to trading in a certain mode(s), sections;
Deprivation of access to trading in a certain mode(s), sections;
Exclusion from the list of bidders
Topic 6. Organization of activities of stock intermediaries
In accordance with the federal law “On the securities market”, under brokerage
activity is understood as “the activity of carrying out civil transactions with securities on behalf and at the expense of the client (including the issuer of issue-grade securities during placement) or on one’s own behalf and at the expense of the client on the basis of paid agreements with the client.” Thus, brokers act in the interests of their clients.
The broker's functions are:
carrying out civil transactions with securities as a commission agent or attorney;
ensuring proper storage and accounting of client securities;
accepting guarantees for the execution of transactions by clients;
informational, methodological, legal, analytical and consulting support for transactions with securities;
providing clients with all necessary information, including information about existing risks;
disclosure of information about their operations.
When performing the functions of a broker, a conflict of interests between the client and the broker himself may arise. To eliminate and minimize it, the following requirements are imposed on brokers:
The broker must carry out clients' orders in good faith;
The broker must fulfill clients' requests in the order they are received;
Transactions carried out on behalf of clients in all cases are subject to priority execution in comparison with dealer transactions of the broker himself, that is, with transactions made in the interests of the broker himself;
The broker must notify the client of the occurrence of a conflict of interest, and otherwise compensate for losses resulting from this conflict;
Client funds must be kept in special brokerage accounts opened for each client in credit organization. The broker can use these funds only within the limits specified in the agreement. The client can request funds from this account at any time; the broker must transfer them within 24 hours at most.
The broker has the right to receive from the client:
Commission remuneration;
expenses incurred;
interest on loans provided;
penalties, fines, penalties.
For clients, using brokers has the following advantages:
— use of the services of qualified sales personnel;
— the possibility of increasing the volume of trading operations;
The relationship between a broker and a client can be carried out on the basis of the following agreements:
- contract of agency. A broker is an attorney, that is, he acts on behalf and at the expense of the client. In this case, the party to the concluded transactions is the client, who is responsible for its execution;
- commission agreement. The broker is a commission agent, acts on his own behalf, but at the expense of the client and in the interests of the client. The party to the transaction is the broker, who is responsible for its execution. It is more beneficial for the client, since all fines and sanctions are paid by the broker.
The brokerage firm opens an account for the client into which funds are credited. The client gives orders to conclude transactions using an approved means of communication (telephone with conversation recording, fax, Internet with digital signature). The personal manager accepts the application and transfers it to the trader for execution. The execution of the contract is considered to be the delivery of the broker's official notice to the client about the conclusion of the transaction. The broker registers the concluded transaction and controls the change of owner (amendments to the register). The broker provides clients with two types of reports:
— operational, for each transaction and portfolio,
— summary (once a month). At the same time, the due remuneration is calculated.
Currently, in order to increase trading volumes and expand brokerage operations, they can provide loans to clients to carry out margin transactions.
Margin transactions are transactions performed by brokers using funds and securities loaned to the client. The collateral for such transactions can only be liquid securities that are included in the quotation lists of leading trade organizers. The value of the collateral is determined at the market price minus the discount. The value of collateral is regularly reassessed. The broker receives interest for providing the loan.
Dealing activity is “conducting transactions for the purchase and sale of securities on one’s own behalf and at one’s own expense by publicly announcing the purchase and/or sale prices of certain securities with the obligation to purchase and/or sell these securities at the announced prices.” Such persons are called dealers. Dealers act in their own interests when transacting in the securities market.
Dealers, in addition to purchase and sale prices, may announce the following conditions under which they are willing to carry out transactions with securities:
— the minimum and maximum number of securities purchased and sold;
— the period during which the prices are valid.
To ensure that the dealer cannot manipulate the market, for example, announce inflated purchase prices for certain securities and cause an increase in the quotes of these securities, and then refuse to conclude transactions at the announced prices, but, on the contrary, sell these securities at inflated prices to others market participants, he is obliged to enter into transactions according to the announced conditions. If the dealer avoids concluding transactions, then a claim may be brought against him for forced conclusion of the transaction and compensation for losses incurred.
A dealer can only be a legal entity that is a commercial organization.
The dealer's income is generated by the difference between the purchase and sale prices of securities. Therefore, dealers usually specialize in certain market segments.
Minimum volume own funds for conducting activities is 0.5 million rubles, when combining activities it increases.
Securities management activities are “the implementation by a legal entity on its own behalf for a fee for a certain period of trust management of assets transferred to it into possession and belonging to another person in the interests of this person or third parties specified by this person:
— securities;
— cash intended for investment in securities;
— cash and securities received in the process of securities management.”
Objects can be JSC shares, bonds commercial organizations, state and municipal bonds.
Parties to the agreement:
A professional participant engaged in securities management activities is a manager.
The owner of the property transferred to trust management is the founder of the management. The founder can be any individual, legal entity, Russian, foreign person or government or local government body.
The person in whose interests the management is carried out is the beneficiary. May coincide with the founder.
The manager does not receive ownership rights to the securities, but he exercises all the powers of the owner:
independently and on its own behalf exercises all rights certified by securities (the right to receive dividends on shares and income on bonds, personal non-property rights of a shareholder, the right to demand payment in redemption of a security, etc.)
independently and on its own behalf exercises all rights in relation to securities in possession (the right to alienate, pledge, carry out other transactions)
The attractiveness of trust management is due to the following reasons:
higher professionalism of the manager leads to higher management efficiency;
due to the scale of activity and maintaining several trust management funds, costs are reduced;
the manager has greater access to financial markets.
In the activities of a manager, as in brokerage activities, a conflict of interest may arise.
The minimum amount of own funds for conducting activities is 5 million rubles, which increases when combining activities.
The manager must develop an investment declaration that contains directions and methods for investing funds. This declaration forms part of the contract.
Topic 7. Decision-making mechanism in the securities market
Participants in the securities market, especially participants in the exchange market, need general information about the state and dynamics of the market as a whole.
Stock indices are generalized value indicators of the state of the exchange and large non-exchange markets. Initially, indices arose in the stock market, then they began to be used in other markets.
Stock indices perform the following functions:
Fibonacci theory. The Fibonacci series is a series in which each subsequent term is equal to the sum of the two previous ones: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc. Features of the series: each subsequent term is 1.618 times greater than the previous one, and each previous term is 0.618 times greater than the next one. According to the Fibonacci series, many natural processes occur: leaves and branches grow on trees, seeds are located in a sunflower, etc. Likewise, the market is assumed to behave in accordance with this series. Based on Fibonacci numbers, straight lines and arcs are constructed, which are considered as potential support and resistance levels, and time zones are constructed whose duration corresponds to the numbers in the series. Significant changes in trends occur at the boundaries of these zones.
2013-12-01
Bonds. Concept, properties, varieties, valuation Financial instrument
Informational. This is the first function of indexes that they were created to implement.
Forecast. Once a certain amount of information about the dynamics of the index has been accumulated, it is possible to build a certain model of its behavior and, using statistical and econometric models, to forecast the market.
Trading. An index can be traded as the underlying commodity in a futures or options contract.
Investment. An index can serve as a guideline when selecting securities in portfolio investment; index portfolios with minimal risks can be created.
Indices are divided into stock indices and stock averages.
Stock average is weighted or unweighted average price that has developed on a particular exchange or non-exchange market. The stock average is measured in monetary units.
Calculation methods:
— unweighted arithmetic average. For example, the Dow Jones index;
— weighted arithmetic average;
— geometric mean. For example, the Footsie indices.
The stock index differs from the average in the following ways:
— a conventional weighing system is always used. For example, the share of a security in the total trading volume on the market, capitalization. But they can also be used equal to weight;
— the index has a time period for comparison (base or previous);
— the index is dimensionless;
— the index can be represented on any convenient scale by specifying a base value, for example, 10, 100, 1000.
Currently, a large number of indices are calculated. The most widespread are the following:
| A country |
Index |
| USA |
Dow Jones stock averages: Industrial DJIA (30 comp., including 3 comp. Services and 3 banks), Transport (20 sets), Utility (15 sets), Composite (65 comp.). |
|
Standard & Poor |
|
|
NASDAQ |
|
|
Value Line |
|
| Great Britain |
FTSE |
| Germany | |
| France | |
| Japan |
Nikkei-225 |
| Canada | |
| Mexico | |
| Brazil |
Bovespa |
| Hong Kong |
Hang Seng |
| RF |
Interfax |
|
Kommersant |
|
|
MICEX |
|
|
RTS Index S&P\RUX S&P\RUIX |
To ensure maximization of income, private traders of securities need to analyze the state of the market and predetermine the movement of prices for securities. Investment attractiveness assets can be valued in two ways:
1. Analysis of the internal real value of assets (fundamental analysis);
2. Analysis of the market price of exchange assets (technical analysis).
Fundamental analysis is based on an assessment of the market situation as a whole and includes the following blocks:
General economic (macroeconomic) analysis. Includes: analysis of the business cycle, GNP, employment, inflation, interest rates, exchange rates, financial and monetary policy. As a result, the socio-political and economic climate is determined.
Industry analysis. Includes: analysis of legislative regulation of the industry, stage of the business cycle, structure, competitiveness, cost level, etc. As a result, a qualitative forecast of industry development is given.
Analysis of the issuer's financial position. Includes: analysis financial condition issuer (solvency, liquidity, financial stability, determining the price of a company, assessing income, market position), development prospects (management, organization of activities)
Analysis of the investment qualities of a security. Local indicators are assessed: earnings per share, beta coefficient, etc.
Fundamental analysis is complex, expensive and time-consuming. It allows you to predict the price for a long period. Given its labor intensity, it is usually carried out by special news agencies, which then sell the finished results in the form of indices and other indicators. Its purpose is to forecast the income that will be generated in the future and determine on its basis the future intrinsic value of the asset. After this, it is compared with the actual price prevailing on the market, and recommendations are made on the purchase or sale of assets. Undervalued assets should be purchased, and overvalued assets should be sold.
Technical analysis is a method of forecasting prices based on studying charts for previous periods of time. Technical analysis is based on the following assumptions:
- movement exchange rates already contains all the information that later becomes an object fundamental analysis;
- there are fairly constant groupings of values on the chart that indicate the continuation of the trend or its change - such groupings are called figures;
— there is no close connection between profitability and risk on the one hand and the exchange rate value.
Technical analysis is relatively easy and fast.
The following indicators are used in technical analysis:
— opening price;
— closing price;
- maximum price;
— minimum price;
- volume;
— demand price;
— offer price.
The following types of charts exist:
1. Line graph
2. Bar chart.
3. Japanese candles.
4. Tic-tac-toe.
When analyzing graphs, trends are used, which come in three types:
- upward or bullish,
- downward or bearish,
- lateral.
The force level is the price value in the vicinity of which price leveling occurs (support and resistance level)
In technical analysis, mathematical apparatus is widely used. To assess the likelihood of trends continuing or changing, the following functions are used:
Indicators are functions that confirm the current trend. For example, moving average;
Oscillators are functions that predict trend reversals.
There are a number of theories used in technical analysis:
RCB. Topic 1. p.
Topic 1. General concepts about RCB
Questions:
The concept of RCB. Its role and place in the structure of the financial market.
Functions of the RCB.
Features of the Russian securities market.
Types of securities.
RCB participants.
Question 1.
RCB is part of the financial market, which represents a set of economic relations regarding the issue and circulation of securities.
RCB is a market in which supply and demand for a special product – securities.
A special product (securities) has the following properties:
1. Liquidity – the ability to quickly get rid of securities (easy to sell). The most liquid is money. The liquidity of securities is influenced by many factors:
A) quality of the issuer;
B) the presence of a buyer for securities.
The liquidity of securities is particularly affected by the regulatory framework governing the purchase and sale of securities. For example, until the mid-90s, privatization was underway and the movement of securities on the secondary market began. Then it was necessary to register the purchase and sale agreement with an investment institute. It was necessary to pay a commission and tax (3 rubles per 1000 rubles transaction). During registration investment institutions acted as tax agents to collect this tax. This tax was later abolished to improve liquidity. Currently, only the issuer pays the duty on transactions with securities.
2. Investment risk is the possibility of losing invested funds. There are:
macroeconomic risks associated with economic development trends:
currency risks;
risk of changes in legislation;
JSC management risks (for example, the presence or absence of a dividend policy).
Since the RCB is part of the financial market, we will consider different points of view on the structure of the latter.
Financial market:
currency market;
credit market (represented by free banking resources, used to provide credit);
Second point of view. Financial market:
money market;
capital market:
credit market;
stock market.
Thus, the role and importance of RCBs has been increasing recently throughout the world. This is due, on the one hand, to an increase in a diverse number of financial instruments, with the emergence of derivative securities that can reduce the risk of investments, and on the other hand, economic growth is always accompanied by the growth and development of securities. On the RCB you can raise funds for your development in a cheaper way.
The crisis on the RCB inevitably affects the state of the economy. In the context of globalization, a crisis in one country affects other countries.
The next trend in the development of securities markets is the liberalization of legislation, especially in developed markets, and increased self-regulation.
Since the 80s there is a trend towards a decrease in the share of developing countries in the securities market (previously the market share was 90%, now 80% are developed countries).
The share of speculative markets is decreasing – the protection of investor rights in the market is coming to the fore.
Traditionally, there are two models for the functioning of the securities market:
American;
Anglo-Saxon (continental).
A) secondary market share. In the first model, 80% of securities are freely traded on the market, in the second - 20%.
B) The role of banks on the securities market (this is very important). In the 30s In America, the Glass-Segal Act was adopted, according to which banks are divided into 2 groups: directly commercial banks - banks with traditional operations, and investment banks– participants of the RCB. In the second model, banks actively participate in the securities market. We have the second one.
Question 2. Functions of the RCB.
The RCB performs two functions:
1. Economic, associated with the flow of capital and attraction of monetary resources through the issuance of securities.
2. Social – the securities market protects the interests of small investors, for whom investments in securities can bring a certain income.
Also, jobs are created at the RCB, usually for highly qualified workers. To work you must have a qualification certificate.
1. General market – manifested in supply and demand, the balance of supply and demand, the possibility of making a profit.
2. Specific - manifests itself, for example, in insuring risks when investing in securities through diversification,
3. Investment function, which consists in the fact that by issuing securities it is possible to attract investment.
Question 3. Features of the Russian securities market
The securities market in any country has its own characteristics. This is due to the features economic development, regulatory framework, traditions of functioning of the securities market.
The Russian Federation is characterized by a mixed model of the functioning of the securities market, because The market is just emerging, not developed.
The formation of the RCB began in the middle of the 19th century, when a Decree was issued according to which joint-stock companies began to be created, and, consequently, corporate securities began to appear - in Tsarist Russia there was a RCB.
If we talk about global experience, the first RCB began to function in Holland. In 1611 the Amsterdam Stock Exchange was created. The East and West India Companies appear. The second exchange is English, the third is American (the New York Stock Exchange was created at the end of the 18th century).
It was typical for the RCB of Tsarist Russia to issue government securities, as well as bond issues with a state guarantee. This was especially true for the construction railway. At the end of the 18th – beginning of the 19th centuries. securities were quoted on European stock exchanges. In the Russian Federation, the first stock department was created in St. Petersburg in 1900.
In the first years of Soviet power, several decrees were issued prohibiting the payment of income on securities. Government bonds were issued regularly. Feature bonded loans – forced placement.
Also typical for Russia at that time was the creation of joint-stock companies with foreign investments for trade abroad.
The revival of the RCB in the form in which it exists throughout the world begins with privatization. During privatization, JSCs were created. Their authorized capital included all property on their balance sheets.
Special types securities issued during the privatization process:
1) preferred shares of type A - they could be received free of charge by members of the workforce under the first option of benefits - no more than 10% authorized capital(workers, pensioners, workers laid off due to at will). The distribution criteria, which were determined at a meeting of the labor collective, usually included length of service and salary.
B) preferred shares of type B. Unlike previous shares, they are not currently in circulation. They belonged to the state. There was no vote on them; the size of dividends was fixed at 5% of net profit. They were convertible - exchanged for ordinary shares when they were sold by the government. Because privatization plans were carried out, type B shares were all sold off.
C) golden share - owned by the state, issued for three years, has the right of veto at the general meeting of shareholders when deciding a number of important issues, for example, a decision on reorganization. In the Omsk region, motor transport enterprises issued gold shares.
The second feature of RCBs in Russia is the lack of experience and behavior in the market. The workers received A shares, but they didn't know what to do with them. Gradually, a new type of activity appears - professional activity at the securities market. The state licenses this activity, i.e. It is necessary to satisfy certain requirements for organizations wishing to work for the RCB.
There is a conflict of interest between financial companies and their clients. Companies with client requests satisfied their own interests first. This cannot be done now. There was huge speculation - fake shares, issues, simultaneous sales of the same shares to several shareholders.
The bulk of transactions are carried out in the Moscow region (96-97%).
Another feature is the rapid change of legislation. Bodies regulating the market are changing. Initially, the RCB was regulated by the Ministry of Finance, then these functions were transferred to the FCSM (now the Federal Service for Financial Markets). In addition to the Federal Financial Markets Service, the market today is regulated by the Ministry of Finance (segment of government securities), Central bank(issue of securities by commercial banks established as joint-stock companies); State Property Committee, Russian Federal Property Fund (regulate the issue of securities during the privatization process), the Antimonopoly Committee (regulates the conclusion of major transactions on the securities market).
There is the following feature - a large number of small investors.
It should be noted the problems of the pronounced speculative nature of the market, its small volumes and illiquidity.
High degree of risk (there are many risks in the market, the biggest is the risk of non-payment of income, the risk of bankruptcy, the risk of loss of the market value of a security).
Undeveloped infrastructure (market infrastructure refers to the conditions for its functioning, as well as clear interaction between market participants, and the high level of development of professional market participants). Developed infrastructure - the market is transparent, because information is open, there are many financial consultants who help in matters of investment, as well as securities management; fast and free access to trading platforms, a guarantee of concluding transactions and settlements on transactions, a simple and accessible system for recording rights to securities.
The underdeveloped infrastructure is associated with the pronounced regional nature of the market, which affects the decrease in the number of professional participants in the regions. Aggressiveness and competition. This is manifested in the fact that market participants do not disclose complete information and use confidential information, especially when buying up controlling stakes.
Features of the RCB according to Mirkin:
illiquidity;
great fragmentation of the system government regulation;
informational secrecy;
lack of trained personnel (this was typical in the mid-1990s).
Question 4. Types of securities.
The identification of homogeneous segments within the securities market is associated with the need to study them and the peculiarities of regulation. Let's look at the main types of securities.
1. Market of basic and derivative securities. The identification of these segments is associated with the presence of basic and derivative securities. The difference lies in the rights that the underlying and derivative securities provide. The underlying security gives the following rights:
A) ownership;
B) the right to receive income.
A derivative security (warrant, option) gives the right to purchase the underlying security. Derivative securities provide insurance to the issuer and the investor. Investments in derivative securities are considered quite risky throughout the world, so transactions in these securities have been prohibited on some exchanges (Japanese markets).
2. Market for government and corporate securities. Government securities are issued by the government and backed by government property, so they are more reliable and less risky. Around the world, as risks decrease, so does profitability. However, in 1998 it was the other way around - government securities had higher returns; the result is a crisis.
Corporate securities are private securities, where only when issuing bonds can we talk about formal security, so they are riskier and more profitable.
3. International and national markets. National securities markets are a system of relations that develop within a given country in connection with the issue and circulation of securities.
International securities markets are a system of relations that develop when international movement valuable papers. In other words, we can say that international markets are a set of national securities markets in interrelation with each other.
On international market general rules are developed (development computer technology and free acquisition of securities of any country).
In any national market there is legislation for residents and non-residents. In Russia there are peculiarities of circulation of foreign securities.
4. National and regional (relative to a certain territory). Selection is related to features legal regulation.
In the United States, there are two levels of legislation: for the entire country and regional laws (regulate the circulation of securities that can only be circulated within the state). Centralized legislation regulates securities that circulate throughout the country. In Russia there are FFMS and territorial branches. But the latter do not have the right to issue regulatory documents; there is no regional legislation. During privatization, the Development Concept of the Regional Central Bank of the Omsk Region was developed.
In Russia there is only national legislation on securities market.
5. Cash and derivatives markets. The allocation is related to the peculiarities of payment for transactions. Futures transactions are concluded for a certain period.
6. Bull market and bear market. The bear market is fighting for a decline, and the bulls are fighting for a rise.
7. Primary and secondary securities market. Distinguishing these two segments is very important. Primary is a market in which issuers sell securities to the original owners. It is in the primary market that the issuer attracts investments.
An underwriter is a professional participant who can buy all securities. If there is an intermediary, the issuer's income will be lower by the amount of the intermediary's remuneration, but there are no problems with placement.
The primary market is typical for the primary issue (issue of securities upon the establishment of a joint stock company), and for additional issue, i.e. subsequent releases. Further circulation of securities is on the secondary market. There are documents related to the specifics of concluding transactions and re-registration of ownership rights to securities.
8. Traditional and computer market. The traditional market has the peculiarity that the buyer and seller meet somewhere and sign documents. The computer market appears with the development of computer technology and the issuance of securities in book-entry form (when there is no form to transfer to the buyer) and allows transactions to be concluded without seeing the buyer and seller.
9. Stock market and bond market. This is due to the separation of two large groups of securities.
A share is a title of ownership and gives voting rights.
Bond – certifies the loan relationship between the issuer and the owner of the bond. A bondholder is a creditor of the Company, is not an owner, and has no voting rights.
10. Organized, or exchange, and unorganized, or street, securities market. In both markets, transactions are carried out in accordance with the law. The stock market is less risky because:
A) only “high-quality” securities are allowed to trade on it (must be listed, i.e. meet certain criteria).
B) payment for transactions is guaranteed. The risk of non-payment is insured by the exchange. Exchanges typically have clearinghouses that handle settlements.
The street market is not responsible for the quality of securities. No one guarantees payment for the transaction.
In America, 90% of shares are traded on the stock market; as a rule, bonds are traded on the over-the-counter market. This is due to the fact that the American stock market has a three-level structure:
New York Stock Exchange – 50% of the market;
The NASDAQ system, which includes young high-tech companies,
AMESK system – 10% (for joint stock companies that could not enter the NYSE).
11. Developed and emerging markets. Markets in 23 countries are classified as developed.
Question 5. RCB participants.
Participants of the securities market are subjects of the securities market entering into agreements with each other economic relations regarding the issue and circulation of securities. They are:
1. State. It is always present at any securities market. This is a special participant, because it can act in several roles:
A) the state regulates the securities market through federal laws and various regulations issued by bodies charged by the state with regulating the market.
B) the state can act as an issuer, i.e. may issue securities.
C) act as an investor. The state buys blocks of shares in enterprises that interest it.
2. Issuers (from the word issue - issue) - market participants who issue securities into circulation.
The following may act as issuers on the securities market:
A) legal entities of any organizational and legal form can issue bonds. Legal entities created in the form of a joint-stock company can issue shares.
B) local governments can be issuers and issue various municipal loan bonds.
B) state.
D) individuals who can issue bills.
The main function of the issuer is to issue securities. However, the issuer can act as an investor by purchasing its own securities and the securities of other issuers. The issuer may repurchase its own securities on its balance sheet only in the following cases:
in order to reduce the authorized capital by decision general meeting shareholders. The repurchased shares are redeemed (cancelled).
at the request of shareholders who have the right to do so. The right appears only to those shareholders who were not present at the meeting or voted against the resolution of certain issues (for example, liquidation or reorganization of the company). The notice of a meeting of shareholders must highlight the issues that give this right.
repurchase of shares on balance sheet by decision of the Board of Directors - no more than 10% of shares outstanding. They must be sold within a year, otherwise - see paragraph b.
Purposes of the issue:
attracting investments for implementation various projects;
carrying out reorganization;
reducing risk when issuing derivative securities.
1) The number of issuers in developed markets quoting their securities on organized markets has stabilized and amounted to 20,000 (of which 8,000 are American issuers, 6,000 are Indian).
2) In emerging markets, the number of issuers has doubled over the past 20 years to 20,000 (versus 9,000).
3) There are about 20 companies on the Russian market, which account for 95% of the transactions concluded.
3. Investors – market participants purchasing securities. They can be divided into two types:
A) Individual – usually presented individuals, small investors. They play a big role in emerging markets. In developed markets, the number of small investors is limited.
In the 60s In America there was a decline in labor productivity. Then the ESOP program began to be implemented: on preferential terms banks provided loans to employees to purchase securities of the companies where they worked. The result was an increase in labor productivity due to increased motivation.
B) Institutional investors are collective investors. All over the world these are trust, investment and insurance companies. Institutional investor diversifies financial investments. An institutional investor carries out portfolio investment, i.e. buys securities of various issuers. Investment diversification is associated with risk reduction. There are several types of portfolios:
Conservative portfolio – low income and low risk (represented, as a rule, by bonds and preferred shares);
Aggressive portfolio - the goal is to generate income, but it is less guaranteed (common stocks, shares of unknown growing companies).
An institutional investor is characterized by the fact that its qualified employees make decisions using technical and functional analysis. Technical analysis answers the question: when to buy, fundamental analysis: what to buy.
In the literature one can find the following groups of investors:
Individual;
Institutional;
Corporate – legal entities that buy securities.
4. Professional participants - provide intermediary services in the securities market:
A) brokers are professional participants acting on behalf, on behalf and at the expense of the client.
B) dealers - can act in the market on their own behalf and at their own expense.
C) depositories - store securities and record rights to them.
D) specialized registrars - keep records of the rights of shareholders.
D) clearing organizations - conduct settlements and offsets.
E) trade organizers - professional participants who form the market infrastructure in terms of conducting transactions with securities.
Recently, the role of self-regulatory organizations has been increasing - associations of professional participants to develop uniform conditions and norms of behavior in the market.
NAUFOR is a national association of stock market participants.
PARTAD – professional association registrars, transfer agents, depositories; brings together participants involved in accounting for shareholder rights.
Professional participants operate in the market only on the basis of a license.
The purchasing decision process in organizations.
The purchasing process is influenced by various factors:
Environmental factors: laws, regulation, economic situation, etc.
Organizational factors: company goals, purchasing policy, resources and structure of the purchasing center, etc.
Interpersonal factors: power structure in the organization, conflicts, cooperation, etc.
Individual factors: age, level of education, status, etc.
The securities market is a set of economic relations that arise between various economic entities regarding the mobilization and placement of free capital in the process of issuing and circulating securities. Functions and types of the securities market. The securities market performs a number of functions that can be divided into two groups: 1) general market functions inherent in any market, and 2) specific functions that distinguish it from other markets. General market ones include:
A commercial function related to making a profit from operations in a given market;
The price function, with the help of which the process of formation of market prices, their constant movement, etc. is ensured;
Information function, on the basis of which the market produces and communicates to its participants information about the objects of trade;
A regulatory function related to the creation of rules for trade and participation in it, the procedure for resolving disputes between participants, setting priorities and the formation of management and control bodies. Specific ones include:
Redistribution function, ensuring the transfer of funds between industries and areas of activity and financing the budget deficit;
The function of insurance of price and financial risks, or hedging, which is carried out on the basis of a new class of derivative securities: futures and options contracts.
The following types of securities markets can be distinguished:
Primary and secondary;
Organized and unorganized;
Exchange and over-the-counter;
Cash and urgent.
1. The primary market is the acquisition of securities by their first owners. This is the first stage of the security sales process and the first appearance of the security on the market. The secondary market is the circulation of previously issued securities, i.e. the totality of all acts of purchase and sale or other forms of transfer of securities from one owner to another during the entire period of circulation of the security.
2. An organized securities market is their circulation on the basis of rules established by governing bodies between licensed professional intermediaries - market participants on behalf of other participants. Not organized market- this is the circulation of securities without observing rules that are uniform for all market participants.
3. The exchange market is based on trading securities on stock exchanges, therefore it is always an organized securities market, since trading on it is carried out strictly according to the rules of the exchange and only between exchange intermediaries, who are carefully selected among all other market participants. The over-the-counter market is the trading of securities without going through the stock exchange. It can be organized or unorganized. The organized exchange market is based on computer systems for communication, trading and servicing of securities. The unorganized over-the-counter market involves the buying and selling of securities by any market participants without following any rules.
4. The cash market for securities is a market with immediate execution of transactions within one to two business days. A derivatives market is a market in which transactions are concluded with a settlement period exceeding two business days.
Securities market infrastructure. The most important role in the functioning of the securities market is played by its infrastructure, which facilitates the conclusion of transactions and serves as information support for issuers, investors and professional intermediaries.
The infrastructure of the securities market includes:
1) organizers of trade - exchanges and trading systems organizing regular trading in securities;
2) systems for settlements and accounting of rights to securities - clearing systems, registrars and depositories that provide settlements for concluded transactions, accounting and re-registration of rights to securities;
3) intermediaries in the securities market - dealers and brokers providing investors with services for concluding transactions on the market;
4) information and analytical systems for investment support; information and rating agencies that provide investors with complete information about the status of issuers.
2. Basic concepts of the securities market
A security is a document certifying property rights in compliance with the established form and mandatory details. The procedure for issuing securities is called issue. State or corporate entities that issue securities are issuers. It should be noted that the issue of securities can be carried out by legal entities or executive authorities or local government bodies, bearing on their behalf obligations to the owners of securities to exercise the rights assigned to them.
Securities can be emissive, i.e. the placement of which requires a prospectus and registration of the issue by regulatory authorities, and non-emission (warehouse receipts, bills), the placement of which does not require a prospectus. The issue procedure is regulated by law and includes several stages. The issue of securities is understood as a set of securities of one issuer that provide the same amount of rights to the owners and have the same conditions of issue (initial placement). In accordance with the law, securities must have equal terms for the exercise of rights within one issue, regardless of the time of acquisition of the security.
The issue is carried out on the basis of a decision on the issue - a document registered with the state securities registration authority and containing data sufficient to establish the scope of rights secured by the security. In this case, the main document defining the parameters of the issued security and the essential conditions of the issue is the issue prospectus. The totality of rights to securities is determined by the security certificate issued by the issuer. It should be noted that in the case of an open (public) issue, when the circle of potential buyers of securities is not limited, the issuer’s responsibilities include providing access to the information contained in the prospectus.
The main types of securities are stocks and bonds, but this market also includes other financial instruments. Let's look at the most important of them.
Shares are equity securities that secure the rights of the owner (shareholder) to part of the capital and to receive part of the profit of the joint-stock company in the form of dividends. Dividend is income accrued annually on each share in accordance with the decision of the shareholder meeting. It should be noted that the issue of shares can only be carried out in a certain ratio to the amount of the paid authorized capital of the issuer. Owners of shares are granted a number of rights, including the right to participate in the management of the enterprise, as well as to part of the property of the enterprise. In case of its liquidation. Shares are divided into ordinary and privileged gated. The difference between preferred shares and ordinary shares is that the dividend on them is set according to fixed rate, and for ordinary shares the dividend may vary or not be paid at all. Holders of preferred shares have a preemptive right to a certain share of the company's assets during its liquidation, but, as a rule, do not have a preemptive right to purchase the company's securities during an additional issue.
Bonds are issue-grade securities that secure the holder's right to receive from the issuer of the bonds, within the specified period, the nominal value and a fixed percentage of this value or other property rights. Bonds are debt obligations expressing a loan relationship. The main types of bonds are bonds issued by the state and municipalities, and bonds issued by corporate issuers.
A bill is a security that defines a loan relationship. The bill contains an obligation to pay the borrower the amount specified in the bill. In this case, the bill of exchange is drawn up in paper form in accordance with legally established standards. Promissory notes are simple and transferable. Unlike a simple bill of exchange, a bill of exchange can be transferred to another person by means of an endorsement (endorsement).
Savings (deposit) certificates of banks are securities certifying the amount of a deposit made to a credit institution and the right of the depositor (certificate holder) to receive the deposit amount and interest upon expiration of a specified period.
Mortgage bonds (mortgage securities) are securities that formalize the collateral relationship. Mortgages certify the right to receive monetary obligations secured by the mortgage of property. The mortgage must indicate a loan or other agreement, the execution of which is secured by the mortgage.
Derivative securities are securities that certify the owners’ right to purchase (sell) securities issued by third parties (the underlying asset) within the terms and conditions specified in the certificate and the decision on the issue of these derivative securities.
It should be noted that along with bonds denominated in Russian rubles, bonds issued by the state and corporate issuers denominated in foreign currency. These securities are placed among foreign investors and circulate outside of Russia.
If we consider securities from the point of view of the order of satisfaction of property, they are divided into registered, bearer and order. At the same time, registered securities are securities, information about the owners of which is recorded in the register of securities owners, and the transfer of rights to them and the exercise of the rights assigned to them require mandatory identification of the owner. Bearer securities are securities, the transfer of rights to which and the exercise of the rights secured by them do not require identification of the owner; in this case, any person who presents this document. Rights under an order security are transferred by making an endorsement on this paper - an endorsement. In this case, the endorser is responsible not only for the existence of the right, but also for its implementation.
Securities are issued in documentary and non-documentary forms. In relation to securities issued in documentary form, the owner is established on the basis of presentation of a security certificate or, in the case of deposit, on the basis of an entry in the securities account. In relation to uncertificated securities, the owner is identified on the basis of an entry in the system of maintaining the register of securities owners or, in the case of deposit of securities, on the basis of an entry in a securities account.
Ministry of Education Russian Federation
Baikal State University of Economics and Law
STOCKS AND BODS MARKET
Short course of lectures
for students of economic specialtiesPublishing house BGUEP
Baikal State University of Economics and LawCompiled by Ph.D. econ. Sciences, Associate Professor I.V. Dubovik
(department of money circulation and credit)
Reviewer Ph.D. econ. Sciences, Associate Professor A.A. Ayushiev
Securities market: A short course of lectures for students of economic specialties./Compiled by. I.V. Dubovik - Irkutsk: Publishing house BGUEP, 2003. - 80 p.
Contains theoretical questions, analytical material, statistical data, examples of some calculations for bonds, shares and bills and test tasks on topics.
Designed for full-time, part-time and accelerated students.
© Dubovik I.V., 2003
© Publishing house BGUEP, 2003
Securities (introductory lecture) | 4 |
|
Bonds | 7 |
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Government securities | 11 |
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Bonds of federal subjects | 18 |
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Corporate bonds | 24 |
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Eurobonds | 29 |
|
Stock | 35 |
|
Bill of exchange | 47 |
|
Test tasks | 52 |
|
| 78 |
^ SECURITIES (introductory lecture)
Basic concepts and characteristics
Classification
Main regulatory documents:
Civil Code Russian Federation. Part one:
Civil Code of the Russian Federation. Part two: Federal Law of January 26, 1996 No. 14-FZ.
Conceptual apparatus:
Issuer is a person who issues securities and bears obligations under them;
Investor - a person purchasing securities on his own behalf and at his own expense;
Denomination is the face value of a security (the value indicated on the title of a documentary security).
Spread is the difference between the purchase and sale prices of a security.
Assignment is a assignment of the right to claim.
Assignor is a person who assigns the right of claim.
Assignee is a person who receives the right of claim.
Endorsement is an endorsement on a document certifying the transfer of rights under it.
Endorser is the person who makes the endorsement.
Endorser is the person in whose favor the endorsement is made.
1. As a category, a security is an economic relationship regarding property and non-property rights, certified in documentary or non-documentary form.
Expressing relations regarding the movement of capital, it is the title of ownership of actual capital. However, not representing wealth, it itself is fictitious capital, the movement of which is subject to the laws of the financial market.
That is, a security is an instrument (assets) of the financial market (securities market). In this capacity, the security has a commodity, and therefore value and monetary, form.
The list of Russian securities is given in the Civil Code of the Russian Federation, as well as in other legislative and regulatory documents. These are: government bonds, bonds, shares, deposit and savings certificates, bearer bank savings book, checks, bills, warehouse receipts, bills of lading, privatization securities, housing certificates, investment shares, mortgages, derivative securities.
Issue-grade securities are securities of mass issue, in which securities belonging to one issue give the owners an equal amount of rights, which indicates that they have a sign of homogeneity, the consequence of which is interchangeability, that is, market “suitability”. Issue-grade securities are subject to mandatory state registration. Bonds and shares are fully homogeneous.
Forms of securities issue:
documentary (cash), presupposing the presence paper media for each security issue. One of its problems is compliance with legal requirements for the form and mandatory details of a security, the absence or non-compliance of which entails the nullity of the paper;
documentary with mandatory centralized storage, which involves issuing a global certificate and maintaining accounts at the place of its storage;
undocumented (cashless, paperless, balance sheet, electronic), involving the maintenance of accounts.
In addition, according to Russian legislation transfer and exercise of rights under securities is carried out only upon presentation.
The property of public reliability of securities means that the obligations under them are of an independent nature (if the form and details are observed, the person obligated under the security must fulfill his obligations and should not check the grounds on which the security was issued).
Main characteristics of securities
Liquidity is the ability to carry out trading operations with a security within the price range on the market (the ability to turn a security into money). Determined by market conditions. It is measured as a percentage of sales volume to supply volume; the size of the spread, as well as the time required to complete the transaction.
Reliability is an assessment of a security from the perspective of its risk, which is reflected in its official rating. It is directly dependent on liquidity.
Yield is the income generated by a security relative to the cost of its acquisition. It is in an inverse linear relationship with reliability and liquidity, therefore, in a direct linear relationship with the risk of the security.
Volatility is the degree of mobility of a security's exchange rate. High volatility of securities negatively affects their liquidity and, consequently, the stability of the entire market.
tax on income on securities, differentiated by type of securities;
exchange rate profit tax, the rate of which for legal entities is equal to the profit tax rate;
tax on transactions with securities, paid in the amount of 0.8% of the volume of issue at par by issuers of issue-grade securities upon their state registration (exceptions are issues of government securities, bonds of the Bank of Russia. Also see No. 36-FZ of March 23, 1998 .).
2. Main features of securities classification:
1 – by issuer.
There are government securities, non-government securities and securities of foreign issuers. The latter do not currently apply to the Russian Federation.
2 – by type of income.
There are securities with fixed and variable income.
3 - according to the method of certification and transfer of rights.
Bearer securities (to the bearer), for which the transfer of rights is carried out by simple delivery of the security. Always issued in documentary form.
Registered, in which the rights belong to the person named in the paper. The transfer of rights is carried out in accordance with the procedure established by law through assignment, where the assignor is responsible for the validity of the corresponding requirement, but not for its non-fulfillment.
Orders, according to which the rights belong to the person named in the document, who himself exercises them, or appoints another person by order (order). The transfer of rights is carried out through an endorsement, according to which the endorser is responsible both for the existence of the rights and for their implementation. Always issued in documentary form.
5 – by economic content and type of law.
There are securities that express co-ownership relations and give the right to participate, and securities that express credit relations and entitlement claims.
BONDS
general characteristics
Basic calculations
Conceptual apparatus:
Discount (disagio) - discount from face value;
Bonus (agio) - premium to the nominal value;
Coupon - coupon for receiving interest;
Strip - a coupon separated from the bond and independently traded on the stock market;
Rate is the market price of the bond, calculated as a percentage of the par value;
Point is a unit of measurement of exchange rate dynamics. The accepted ratio is: 1 point = 1 percent; 1 basis point = 1/100 percent.
1. Bond is an issue-grade security expressing a credit relationship, giving the right to claim, for which the issuer is the debtor and the investor is the creditor.
The volume of the global bond market today is about $40 trillion, including $30.8 trillion. - bonds domestic market, the rest are Eurobonds. 50% of the bond market is in the USA (75% of the corporate bond market), 20% in Japan, 10% in Germany. France and Italy each occupy 5% of the world bond market, Great Britain - 3%. Russia's share is 0.13% of the global bond market.
A bond is an obligation of the issuer to return to the investor the amount of money received from him within a specified period of time (repay the bond) and pay the agreed income.
There are market and non-market bonds. The latter do not have the right to free circulation on the market.
The amount of income, as well as other conditions for the placement, circulation and redemption of bonds, is set by the issuer and determined by a number of factors:
reliability of the issuer (reverse relationship, see topic “Securities”);
the maturity of the bond (the relationship is direct, determined by the direct relationship between the maturity of the bond and the risk on it);
inflation rate (taken into account in the amount of income);
income from previous loans of the issuer;
income set by competitors;
income on the government securities market and the capital market;
income in alternative markets (alternative opportunities for potential investors), etc.
Based on the type of income, bonds are divided into interest-bearing and non-interest-bearing.
Interest-bearing bonds are bonds for which the income is the interest rate, which is charged on the face value (nominal rate).
A typical interest-bearing bond is purchased and redeemed at par.
Depending on the method of interest payment, bonds can be coupon or zero-coupon.
Coupon - documentary bearer bonds issued with a coupon sheet consisting of coupons, the number of which corresponds to the number of income payments. Coupon bonds are the basis for the formation of the strip market in the country.
The interest rate on bonds can be either fixed or variable.
A fixed rate in the form of a constant does not change during the circulation period of the bond. A fixed rate in the form of a fixed rate changes during the bond's circulation period, but is established in advance and is known to market participants.
The variable interest rate reflects changes in the market rate and is the result of issuers adapting to unstable economic situation. Increasing, in conditions of inflation, the risk of failure by the issuer to fulfill its obligations, the variable interest rate requires the establishment of additional parameters for the bond:
frequency of percentage revision;
"base" of reference;
percentage calculation method.
According to the method of interest calculation, a distinction is made between bonds with simple interest accrual and bonds with compound interest accrual.
Interest-free (zerobond) - bonds that are sold at a discount and repaid at par. The income is a discount.
In developed countries, discount and interest-bearing bonds have a ratio of 1:4.
Bonds can be repaid either during the circulation period in parts (in constant or changing amounts according to a certain method), or at the end of the circulation period in the entire amount due for payment.
2. ^
Profitability calculation
Current yield is calculated for interest-bearing bonds and shows the nominal interest rate, per unit of actual costs of purchasing a bond.
Yield to maturity characterizes the income received when redeeming a bond with any type of income per unit of actual costs for its acquisition.
The final (average annual) profitability is calculated using the formulas given below.
We will begin our consideration of the fundamentals of the theory of the securities market by defining the place and functions of the securities market, as well as defining the concept of the financial market as more general than the concept of the stock market or securities market. The financial market has historically been divided into the credit market, or loan capital market, and the securities market, or, as some authors called it, the fictitious capital market.
The main function of the securities market as part economic system is to ensure the flow (movement) of monetary resources from one economic entity to another, from one sector of the economy to another. Such a movement of monetary resources can be associated both with the ongoing processes of distribution and with the processes of production (and, possibly, exchange). In any case, the operation of the mechanism of this market is ensured by the presence a special form of existence of monetary resources – securities and the activities of special (formed as part of this system) economic entities. Main active target function of the financial market(determining its content) is the fast and cheapest possible supply of economic entities with the financial resources they need. In other words, we state the participation of the financial market (including the securities market) in performing the function of “financing the economy.” Financial market– the sphere of distribution (allocation) of monetary resources, occurring under the influence of supply and demand for monetary resources and other factors, the sphere in which relative prices for monetary resources of different qualities are formed (currency, urgency, additional requirements for the borrower).
Stocks and bods market– part of the financial market and financial sector, which, along with its other segments, organizes the transfer of monetary resources between agents who present demand and supply for them, and participates in the formation of relative prices for these resources. Moreover, the method of moving monetary resources within the securities market is associated with the transformation of monetary resources into the form of securities that have signs of public reliability and negotiability, so that the movement of monetary resources within this market is transformed into cyclical forms with a continuous process of pricing in relation to securities. The functions of the securities market as part of the economic system include:
– allocation function – a function of efficient allocation of resources in the economy through participation in intersectoral, intersectoral and intercompany capital flows;
– function of distribution (redistribution) of income in the economy;
– function of accumulation and mobilization available funds and savings of the private sector of the economy in the interests of macroeconomic accumulation, ensuring the transformation of savings into investments;
– function of concentration and centralization of capital, business consolidation;
– the function of determining the degree of effectiveness of the direction and use of funds;
– information function;
– the function of redistributing property rights and dividing spheres of influence between owners of monetary capital;
– capital export-import function.
8.2. Classification of types of securities
Classification of securities helps to reveal mutual connections in concepts, types of securities and rules of their circulation on the basis of certain principles and express these connections in the form of a logically constructed system. The classification of securities serves to determine the general and distinctive features of various types of securities, a better understanding of the essence of the formation and organization of the securities market, the essence of the financial and economic processes that underlie its functioning.
Various securities can be classified according to a number of criteria:
1) types (economic essence) (government bonds, bonds, bills, checks, deposit and savings certificates, bank savings books bearer, simple and double warehouse receipts (and parts thereof), bills of lading, shares, privatization securities, options);
2) form of issue and method of registration of issue (classes, which include emission and non-equity securities);
3) the basis of the issuer’s organizational and legal affiliation (groups, consisting of government and corporate securities);
4) functional purpose valuable papers (categories, including debt, equity, payment and title securities);
5) form of existence and form of fixation of the owner’s rights (categories, such as certificated and uncertificated securities);
6) the method and procedure for transferring ownership rights (types, in which the security is presented as registered, order or bearer);
7) terms of circulation (short-, medium- and long-term; unlimited);
8) type of income (income, non-income, interest, dividend);
9) the nature of circulation of securities (stock and commercial);
10) stages of securing the owner’s rights (primary and derivative);
11) type of use by issuers and holders (investment, or capital and commercial).
Classification by type (economic essence) of securities.A share is an issue-grade security that secures the rights of its owner-shareholder to:
– participation in the management of a joint-stock company (JSC);
– receiving part of the JSC’s profit in the form of dividends;
– receipt of part of the JSC’s property remaining after its liquidation.
Bond – an issue-grade security certifying the owner’s right to receive from the issuer of the bond within the period specified in it the nominal value - the amount of the principal debt paid upon its redemption in in cash or other property equivalent. A bond may also provide for the right of its owner to receive income in the form of interest accrued to the face value of the bond, or other property rights (see Article 2 Federal Law“On the securities market” and Art. 816 Civil Code of the Russian Federation.)
Government bond(Article 817 of the Civil Code of the Russian Federation). – legal form of agreement certification government loan; it certifies the right of the lender (i.e., the owner of the bond) to receive from the borrower (i.e., the state) the funds lent to him or, depending on the terms of the loan, other property), established interest or other property rights within the time limits provided for by the terms of the issue loan in circulation.
Bill – This is an unconditional written monetary debt obligation drawn up in the form established by law, issued by one party (the drawer) to the other party (the holder) and paid with stamp duty. Let us clarify the definition of a bill of exchange.
Bill – a document, the contents of which are precisely established by law, certifying the unconditional abstract monetary obligation of one agent and the rights of another agent arising from it and having two varieties provided for by law - a promissory note and a bill of exchange.
Promissory note (solo bill) – a written document containing a simple and unconditional promise by the drawer to pay, at a certain time and at a certain place, a specified amount of money to the holder or his order.
Bill of exchange (draft) – a written order from the drawer (drawee), addressed to the payer (drawee), to pay the amount of money specified in the bill to the holder (remitee).
Bill of exchange – an unconditional obligation of another (and not the drawer) of the payer specified in the bill to pay upon the arrival of the period stipulated by the bill the amount of money received on loan (Article 815 of the Civil Code of the Russian Federation).
Commercial bill – document through which the commercial loan in the form of deferred payment for goods sold. The scope of its circulation is limited, since it serves only the process of bringing goods to market and determines the credit obligations issued to complete this process by replacing the additional capital required at the time of circulation.
Financial bill– a type, a surrogate of a promissory note, issued by a credit institution (issuer) and transferred to the person who has made the full payment (the holder of the bill), corresponding to the amount of the bill. This security can be considered as an instrument that arises as a result of the execution of loan transactions in cash and serves as a means of payment in settlements, where it acts exclusively as a “foreign” bill.
– a written certificate from a credit institution regarding a contribution (deposit) of funds, certifying the right of the investor (certificate holder) to receive, upon expiration of the established period, the amount of the contribution (deposit) and interest on it.
Bearer savings book(Article 843 of the Civil Code of the Russian Federation) is a legal form of certification of the agreement bank deposit(deposit) with a citizen and depositing funds into his account, according to which the bank that accepted the sum of money (deposit) received from the depositor or received for him, undertakes to return the deposit amount and pay interest on it to the person who presented the savings book.
Savings (deposit) certificate(Article 844 of the Civil Code of the Russian Federation) - a security certifying the amount of the deposit made to the bank, and the right of the depositor (certificate holder) to receive, upon expiration of the established period, the amount of the deposit and the interest stipulated in the certificate in the bank that issued the certificate, or in any branch of this bank (in practice, savings certificates are distributed among citizens, and deposit certificates - among legal entities).
Housing certificates– securities denominated in units of the total area of housing and having an indexed nominal value in monetary terms, giving their owners the right to demand from the issuer their repayment by providing ownership of residential premises, the construction (reconstruction) of which was financed from funds received from the placement of these securities securities, or by paying the indexed cash value of the certificates.
Check(Art. 877 Civil Code of the Russian Federation) - a security containing an unconditional order from the drawer to the bank to pay the amount specified in it to the check holder.
Simple warehouse receipt– a bearer security, drawn up in the form of a written document established by law and confirming the availability of goods in the warehouse.
Double warehouse receipt– a security consisting of two parts: a warehouse receipt and a pledge certificate (warrant), which can be separated from one another and, as a result, become independent securities.
A double warehouse receipt consists of two parts - a warehouse receipt and a pledge certificate (warrant), which can be separated from each other, and each individually is a registered security.
Warehouse receipt– a non-issue security issued by a warehouse in paper form and confirming the fact that the goods are in the warehouse.
Warehouse certificate (Articles 912–917 of the Civil Code of the Russian Federation) is a security document confirming the acceptance of goods for storage.
Bill of Lading – a security, which is a type of document of title, granting its holder the right to dispose of cargo and containing the terms of the contract for the carriage of cargo by sea.
Mortgage – a registered security certifying the following rights of its owner:
– the right to receive performance under a monetary obligation secured by a mortgage, without providing other evidence of the existence of this obligation;
– the right of pledge on property encumbered with a mortgage.
Mortgage - an economic institution that regulates relations arising from one of the types of property collateral, which serves as security for the execution of the main monetary obligation debtor - pledgor to the creditor - pledgee, who acquires the right in the event of failure of the debtor to fulfill the obligation secured by the pledge to receive satisfaction at the expense of the pledged real estate.
In the process of developing the mortgage institution in Russia, a slightly different, but also multi-level model was developed, in which such types of securities act as mortgage-backed bonds(see Article 2 and Chapter 2 of the Federal Law of November 11, 2003 No. 152-FZ “On Mortgage Securities”). This Law also introduced the concept “mortgage participation certificate” – as a registered security certifying the share of its owner in the right common property for mortgage coverage, the right to demand from the person who issued it proper trust management of the mortgage coverage, the right to receive funds received in fulfillment of obligations, the requirements for which constitute the mortgage coverage, as well as other rights provided for by the Law “On Mortgage-Based Securities”.
Issuer option – an issue-grade security that secures the right of its owner to purchase, within the period specified therein and/or upon the occurrence of the circumstances specified therein, a certain number of shares of the issuer of such an option at a price specified in the issuer’s option.
Actually options (not issuer options) are currently regulated in Russia (before the law “On Derivative Securities” was issued). Regulations on activities for organizing trade on the securities market, approved by order of the Federal Financial Markets Service of December 15, 2004 No. 04-1245/pz-n. However, from the definitions contained in this Regulation (see clause 6.1) it follows that the specified objects of law are not securities, but are types forward transactions. Wherein call option (delivery option agreement (contract) to buy) is defined as follows: an agreement is a contract that provides for the obligation of one of the parties (the person obligated under the option agreement to the contract) to pay money depending on changes in prices for securities, which also provides for the obligation of this party to sell to the other party (the person entitled under the option agreement to the contract) the relevant securities upon its demand, which may be stated at a certain period or at a certain date in the future at a price determined at the conclusion of the option agreement of the contract.
Put option (delivery option agreement (contract) to sell) is defined in a similar way: an agreement is a contract that provides for the obligation of one of the parties (the person obligated under the option agreement to the contract) to buy from the other party (the person entitled under the option agreement to the contract) the relevant securities upon its request, which can be stated in a certain period or in a certain date in the future at a price determined when concluding an option contract.
The same paragraph of the document in question contains a third definition. Settlement option agreement (contract) It is proposed to consider an agreement that provides exclusively for the obligation of one of the parties (the person obligated under the option agreement to the contract) to pay money depending on changes in prices for securities or on changes in the values of stock indices.
Classification based on the issuer's organizational and legal affiliation. The right to issue securities is legally assigned to both the state (represented by the Ministry of Finance of the Russian Federation, the Bank of Russia and other entities) and to legal entities registered on the territory of the Russian Federation. On this basis, securities can be divided into groups, which are presented state And corporate securities.
In turn, the group of government securities is formed by three subgroups - federal(issued by public authorities federal level), subfederal(issued by the subjects of the Federation) and municipal(issued by local governments) securities.
To government securities in relation to Russian market include GKOs (government short-term bonds), OFZs (bonds federal loan), government savings bonds, domestic government foreign currency loan bonds, bonds of constituent entities of the Russian Federation. As part of the consideration of government securities, securities issued by local governments (municipal securities) are also studied.
Classification according to the method and procedure for transferring ownership. According to civil law There is a certain procedure for fixing and transferring ownership of securities. The subjects of the rights certified by a security (see Article 145 of the Civil Code of the Russian Federation) may be the person named in it, its bearer, as well as the named person, who himself can exercise these rights or appoint another person by order. On this basis, registered securities, bearer securities and order securities are in circulation on the securities market.
Due to the fact that the classification according to the subjects indicated in Art. 145 of the Civil Code of the Russian Federation, will not determine the essential feature of separation between the designated securities; we will consider the method of transfer of ownership of securities as the basis for the corresponding classification. On this basis and in accordance with Art. 145 and 146 of the Civil Code of the Russian Federation, securities are divided into the following types:
1) registered securities – securities, the rights of the holders of which are confirmed by the name (name) of the owner included in the text of the security and (or) an entry in the registration book (register) of securities, and are transferred in the manner established for the assignment of claims (assignment); Registered securities include debt and equity securities (except bearer bank books), payment and title documents, options, mortgages, for example registered shares and bonds, deposit and savings certificates, mortgages, warehouse receipts;
2) bearer securities – securities, for the implementation and confirmation of the rights of the owner of which simply presenting them is sufficient, and for transferring to another person the rights certified by such securities, it is sufficient to deliver the security to such person; Bearer securities include all securities admitted for circulation on the territory of the Russian Federation, except for options and mortgages. Examples: bearer stocks and bonds, bearer checks, simple warehouse receipts (warrants), bearer bills of lading;
3) order securities – securities, the rights of the holders of which are confirmed both by the presentation of these securities and by the presence of orders and endorsements in them, while the rights under an order security are transferred by making an endorsement on this paper - endorsement; Order securities include payment and title securities, such as a bill of exchange, a bill of lading, a double warehouse receipt and its parts.
It is necessary to pay attention to the fact that some types of securities can be issued in both registered and bearer form. These include, for example, corporate bonds (see paragraph 3 of article 33 of the Federal Law “On joint stock companies Oh").
The circulation of securities is a procedure for concluding civil transactions involving the transfer of ownership rights to them.
Registered, order and bearer securities differ from each other in the procedure for transferring the rights certified by the security. The easiest way to transfer rights is certified by a bearer security. To do this, simply hand over the security to the new owner.
The rights certified by a registered security are transferred in the manner established for assignment of the right of claim (cession). The person transferring the right under a security is liable for the invalidity of the corresponding requirement, but not for its failure to fulfill it.
Thus, the person who sold a registered security is liable only if this security turns out to be counterfeit. The exercise of rights certified by a registered security is carried out by filing claims against the person who issued the registered security.
The exercise and transfer of rights certified by registered securities occurs by securing the rights in a special register. In this case, registration of rights can be carried out using paper and/or electronic media. Hence, the form of securities issue can be documentary or non-documentary. There are two ways of transferring and fixing rights to registered documentary and uncertificated securities to the acquirer.
The right to a registered documentary security passes to the acquirer:
– if the registration of rights to securities is carried out with a person carrying out depositary activities, with the deposit of a security certificate with the depository - with the help and from the moment of making a credit entry in the acquirer’s securities account;
– if accounting of the acquirer’s rights to securities is maintained in the register maintenance system - with the help and from the moment of transfer of the securities certificate to the acquirer and with the help and from the moment of making a credit entry on personal account acquirer.
The right to a registered uncertificated security passes to the acquirer:
– in the case of recording the acquirer’s rights to securities in the depository - with the help of and from the moment of making a credit entry in the acquirer’s securities account;
– in the case of recording the acquirer’s rights to securities in the register maintenance system – with the help of and from the moment of making a credit entry to the acquirer’s personal account.
The transfer of rights under an order security is carried out differently. The rights to these securities are transferred by making an endorsement on them, called endorsement. The endorser (seller of an order security) is responsible not only for the existence of the right, but also for its implementation. When making an endorsement, only the signature of the endorser is sufficient.
Thus, the owner of an order security can demand fulfillment of his rights under this security, both from the person who issued it and from any person in the chain of endorsements.
Classification by terms of circulation. The circulation of securities may be clearly limited by a time frame or may not be limited due to the specifics of the relationship between the person who issued the security and its holder (investor). Debt securities based on borrowing relationships, with very few exceptions, are urgent securities. Such securities can be issued with a circulation period of up to one year, and then they are usually classified as short-term securities. Securities with a circulation period of one to five years are called medium term and securities that have a circulation period of more than five years - long-term. Perpetual debt securities (bonds) are called perpetuities.
The circulation period of equity securities is usually limited by the life of the issuing company. It is advisable to define such securities as perpetual. These types of instruments include shares of joint stock companies (with the exception of convertible preferred shares, the circulation period of which is limited by the conversion period).
8.3. Securities market regulation
Federal authority The executive branch that exercises the functions of control and supervision in financial markets is the Federal Service for Financial Markets (FSFM). This service represents a very special element in the system of public authorities. This feature is due to the fact that, unlike other federal services that are subordinate to ministries, the FFMS is directly subordinate to the Chairman of the Government of the Russian Federation. Some areas of activity of other liquidated government structures were transferred to the new regulator. Thus, the functions of control and supervision over the formation and investment of pension savings, from the liquidated Ministry of antimonopoly policy Russian Federation – control over commodity exchanges and derivatives market, from the Ministry of Labor and Social Development of the Russian Federation - supervision of non-state pension funds.
The FFMS carries out its activities directly and through territorial bodies. For this purpose, the service was transferred to the territorial bodies of the abolished FCSM.
Decree of the Government of the Russian Federation of April 9, 2004 No. 206 “Issues of the Federal Service for Financial Markets”, dated June 30, 2004 No. 317 “On approval of the regulations on the Federal Service for Financial Markets” and the edition of the Federal Law dated June 29, 2004 “ On the Securities Market" contains a short list of functions of the financial market regulator, which include the following:
1) carrying out state registration of issues of securities and reports on the results of the issue of securities, as well as registration of prospectuses of securities;
2) ensuring the disclosure of information on the securities market in accordance with the legislation of the Russian Federation;
3) exercising functions of control and supervision in relation to issuers, professional participants in the securities market and their self-regulatory organizations, joint-stock investment funds, management companies of joint-stock investment funds, mutual investment funds and non-state pension funds and their self-regulatory organizations, specialized depositories of joint-stock investment funds, mutual investment funds and non-state pension funds, mortgage agents, mortgage coverage managers, specialized depositories mortgage coverage, non-state pension funds, Pension Fund RF, state management company, as well as in relation to commodity exchanges, bureaus credit histories and housing savings cooperatives.
Until the proposed amendments to the current legislation, the Federal Service for Financial Markets is also assigned the functions of managing and ensuring the work of the Commodity Exchange Commission.
Additionally, the FFMS provides:
– generalizing the practice of applying the legislation of the Russian Federation in the field of its competence and submitting proposals for its improvement to the Government of the Russian Federation;
– development in the prescribed manner of draft legislative and other regulatory legal acts;
– organizing research on the development of financial markets. The creation in Russia of a market regulation system based on the idea of mega-regulation is a natural result of the formation of a financial market with a high degree of centralization. In this case, the introduction of a single regulatory body is seen by experts as a justified step. If we talk about global experience, we will not find a unified approach to building a financial market regulation system. For example, in six EU countries (France, Spain, Portugal, Italy, Greece and the Netherlands), regulation is carried out by an independent body engaged exclusively in the supervision of exchanges and operating on the model of the American Securities and Exchange Commission (SEC - Securities and Exchange Commission). . In eight countries (Great Britain, Belgium, Luxembourg, Germany, Austria, Denmark, Sweden and Finland) this function is performed by a mega-regulator.
In the United States, in addition to the Securities and Exchange Commission, the following have regulatory powers in the financial market: the Commodity Futures Trading Commission (CFTC); Comptroller's Office money circulation(object of regulation – commercial banks registered by the federal government); State Banking and Insurance Commissions (regulated by depository institutions registered by state governments); National Credit Union Administration (NCUA); Federal Deposit Insurance Corporation (FDIC)(object of regulation - commercial banks, mutual savings banks, savings and loan associations); Federal Reserve System (FRS; FRS; Fed)(object of regulation – all depository institutions); Bureau of Supervision of Savings Institutions (regulated by savings and loan associations).
