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Answer» 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. | | (2) Functions | 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 market, 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. |
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