Primary Market and Secondary Market.
|Basis||Primary Market||Secondary Market|
|(1) Meaning||A security market in which new issue of securities i.e. fresh or newly issued fresh shares, or debentures are sold by the newly established or existing company is called Primary Market.
||A Security market in which second hand or existing securities are purchased and sold repeatedly is called secondary Market|
||Its main function is to raise long-term funds through fresh issue of securities. So only buying of securities takes place securities can't be sold here by investors.||Its main function is to make available continuous and ready market for existing long-term securities. In this market, both buying and selling of securities by the investors takes place.|
|(3) Participants||The main participants of this market are financial institutions, mutual funds, underwriters, individual investors etc.
||The main participants of secondary market are the participants of primary market, stock brokers and the members of stock exchanges.|
|(4) Listing Requirements||In case of primary marrket, listing of securities are not required.||In the case of secondary market, listing of securities are required for their authorised trading.|
|(5) Determinants of Price
||In this market, the prices of securities are determined by the management of the Corporate houses with due compliance with SEBI's requirement in respect of new issue of securities.
||In the secondary market, the prices of securities are determined by the forces of demand and supply of the securities in market.
Concept: Transfer and Transmission of Shares
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