Securities and their types are essentially documents that, subject to mandatory details and the required form, certify property rights. These rights may be transferred or exercised solely upon presentation of such a document. To transfer the rights that are certified by this document, proof of their consolidation in a special established register is necessary. In addition, it is customary to say that securities and their types are some varieties of things, being movable property. It is appropriate to say that they are a property right to part of the property or to all. This is what forces them to be divided into debt, equity and derivatives. Other forms of separation are presented below.
Securities and their types
Let's take a look at some of the categories and views that you may encounter. Securities are non-issuing, for example, promissory notes and issuing ones, in this case we are talking about stocks or bonds. The legislation clearly spells out what concerns issue papers: they mean a document characterized by certain signs: it fixes a set of non-property and property rights; possesses equal terms and volumes of exercise of rights in one issue from the moment of acquisition; placed by issues.
Securities may be issued in documentary and non-documentary form. Under the documentary form refers to the application of a security on a form that meets the regulatory technical requirements of the established documentation. Production of forms is allowed exclusively to the organization that has received this legal right. In the case of the issue of a non-documentary form of a security, we are dealing with its absence in physical form, but its existence and assignment to the holder are necessarily indicated in the register. The issue of such securities is made out by a special document called the global certificate, which necessarily prescribes the parameters of the issue.
Documentary securities and their types
Such securities may be order, registered or bearer. Orders are transferred to another person solely by order of its owner, that is, by written order. An example of order paper is a bill of exchange. The name of the owner is indicated on the letterhead paper. Such a document is transferred to another person only with the help of assignment, that is, a transcript. In this case, the name of the future owner must be indicated on the form. If we talk about bearer paper, then it does not have the name of the owner, but it is transmitted through delivery. Separately, it is worth considering government securities and their types. We can say that their main difference from all the others is the issue by the state.
All papers are placed on the primary market, and are traded on the secondary. It is the primary market that brings profit to issuers who put their securities on sale. Accommodation can be closed and open. Closed is understood as the placement of securities in a circle of predetermined persons at a cost that is agreed in advance, which avoids wide distribution. Open placement involves providing access to securities of an unlimited circle of persons. In this case, the issuer can place them at a price that will be most beneficial to him. The secondary market is stock exchange, OTC and organized. Here, from the sale of securities, all participants receive a profit.
This material examined some types of securities and their classification in general terms. For a more thorough study of this issue, you can refer to specialized sources.