The financial market includes several sectors. One of them is the stock exchange. The securities market is a source of income and redistribution of funds. Investors buy shares of promising companies and banks, accelerating their growth. Here in circulation are documentary and non-documentary securities. The features of their functioning will be discussed in the article.
Definition
The securities market is a set of economic relations on issues of issuance and circulation of the Central Bank. It is also called the stock exchange. The main purpose of the market is to ensure the financial development of the economy. This can be done with bank loans and through securities. In the second case, funds are allocated by investors:
- to developing companies that can generate income in the short term;
- into promising industries that can accumulate profits and capitalization in the long run.
In the primary market, securities are placed at the time of issue. This is where financial resources are mobilized. Issuers, investors, underwriters, FFMS - participants in this sector. In the secondary market there is a resale of the Central Bank, the direction of capital in promising industries. Here the market rate of assets is formed.
RZB Functions
- Redistribution of capital between sectors of the economy.
- Financial risk insurance with options and other derivatives.
- Accumulation of available funds.
- Investing in the economy.
- The flow of capital into profitable industries.
- The function of "overheating by investment." The value of securities is changing. After a rush of demand, capitalization of assets sets in, the price returns to the market.
- Providing information on the level of market development.
Issuing securities
This is the most common type of shares on the market. Such securities fix the property rights of the owner, subject to assignment and unconditional exercise, in the manner prescribed by law; appear as a result of release; have equal rights regardless of the time of purchase.
Issuing securities include:
- action - secures the owner’s rights to receive dividends, management of the organization, the share of property after the liquidation of the organization;
- bond - confirms the holder’s right to receive from the issuer the nominal value of the Central Bank or other property within the agreed time frame;
- option - secures the holder’s right to buy / sell a specified number of shares at a fixed price within the agreed time frame.
Emission securities are available in two forms:
- certificate in which the holder is indicated;
- non-documentary form of equity securities - provides for the fixation of owners in the register.
History of occurrence
The definition of “paperless securities” comes from American law. In the 80s of the last century, negotiable, title deeds and stock certificates with different legal regulation were used. In Art. 8-102 US ETK defines the concept of securities in non-documentary form: it is a share for participation in the property of the issuer, which is not represented by another document, and its transfer is recorded in special books.
France was the first to “dematerialize” the certificate. Since 1984, the legislation of the country secured such an opportunity in relation to stocks and bonds. In Germany, the issuance of "global certificates" was permitted by special law.
Securities Market in Russia
With the development of information technology, the form of confirmation of property rights from documentary has been changed to electronic. Such certificates are also called securities, but they are subject to legal norms of ownership. This trend of securitization reflects well the mobility of financial relations. The turnover of the "dematerial" Central Bank is secured by Art. 142-149 of the Civil Code of the Russian Federation. The issuer, having obtained a license, can fix the rights with the help of electronic computer technology. The order and rules of these operations are regulated by law.
Non-documentary securities are electronic documents. The law defines the procedure for fixing, confirming and making transactions on them. Responsibility for the preservation of records lies with the person who updated the registry. It also constitutes a “decision on the issuance of the Central Bank”, registers it with state authorities. This document certifies the right of owners. It is made in triplicate. One remains with the owner, the second is attached to the registry, and the latter is transferred to the repository.
The peculiarity of such documents is that the issuer's obligation is expressed as an entry on a special “depot” account, which contains all the necessary details. In this form, the law allows the issuance of shares and bonds. But the issue of bills, carried out in this way, is prohibited.
Handling problems
Domestic legislation also allowed the use of “dematerial” securities. AO during emissions should only register their release in books, and may not be spent on the preparation of forms. Government short-term bonds are another example of uncertified securities. The law allows the issuance of any type of certificate in this form. But the legal regime for the regulation of disputes on them does not exist. All issues are resolved on the basis of the provisions of Art. 28 of the Federal Law "On RZB", which states that ownership of such objects passes in the same way as things.
Legal Aspects
In American law, the property itself is the property. For Russian law, this approach is unacceptable. There is no concept of obligation in American law. Therefore, the automatic transfer of these interpretations and regulation rules to the domestic market is impossible. The purchase and sale of securities should be regulated on the basis of existing law.
Prior to making amendments to the CG of the Russian Federation, issues of issue were regulated by the "Regulation on the issue of the Central Bank" No. 78. This document provided for the possibility of the existence of certificates in the form of records on accounts. The new concept of securities from the Civil Code provides that the main purpose of the document is to fix certain property rights. Their transfer is possible without a certificate. In Art. 149 of the Civil Code stipulates that the rights to securities are recorded in a special register. And this already makes one of the functions of this tool meaningless.
Analyzing these norms of the law, we can conclude that uncertificated securities are property rights, which can be certified as a general rule or by fixing a record in the registry.
Ways to solve the problems of domestic RZB
- Redistribution of shares, the allocation of financial resources for the restoration and development of production in Russia.
- Overcoming political instability, economic crisis.
- Improvement of legislation.
- Enhancing the role of the state: the final choice of a model for the functioning of the stock market, identifying sources of replenishment of the budget, the formation of an effective system of supervision.
- Protection of investments in documentary and non-documentary securities.
- Development of depository, clearing and agent networks that record the movement of documents.
- Expanding the volume of information on the activities of issuers. Creation of a common system of market assessment indicators, introduction of ratings, development of a network of publications specializing in individual sectors of the economy as investment objects.
Features of the European model
The American market is the most developed in terms of infrastructure, profitability, capitalization, turnover, liquidity. The legal framework was laid after the economic crisis of the 30s. last century. Then the concept of money management was revised. The laws "On the Central Bank" (1933), "On the Stock Exchange" (1934), and other acts came into force. Therefore, to date, uncertified securities are freely traded in the United States.
The West European market functions more efficiently than the domestic one, although it is inferior to the American one. This is a great merit of the mega-regulator, his established work. Each sector of the financial market performs a specific list of functions. And in case of a lack of capital, resources are redistributed. All these actions are regulated by the relevant ministries (finance and economic affairs).
Trends in the development of global securities market
- Concentration of assets - the concentration of capital among professional participants on the world's largest stock exchanges. As a result, the reliability of certificates and bidders is increased.
- Globalization - the rapid growth of Central Bank issues.
- Computerization of the market - the use of the latest technologies, their constant updating, providing communication tools available to any investor.
- Strengthening government regulation - due to the need to protect the rights of investors, improve the reliability of documents, issuers, the transparency of the operation of stock exchanges, the security of computer data processing systems.
- The introduction of Internet technology.
- Distribution of new tools, systems and infrastructure.
- Securitization - the transfer of funds from traditional forms (savings and deposits) to the Central Bank, with the aim of combining illiquid assets and putting them into circulation.
- Mergers and acquisitions by leading exchanges of their partners.
Registered securities of VS Bearer Central Bank
For some time, all the securities of the Russian Federation were regulated by the same legal acts. With amendments to the legislation, the rights of the holder after the disappearance of the certificates received independent significance. Such documents do not take on the properties of things, but change the way they are fixed. As a result, there is a need to improve the protection of the interests of owners. The "replacement" of paper media leads to the disappearance of the classic name certificates. A non-documentary form of bearer securities is unlikely to appear. And “dematerialized” warrants, although not prohibited by law (Article 149 of the Civil Code), will not be widespread. Therefore, only issuing securities remain uncertified.
Conclusion
The securities market in Russia functions to ensure the financial development of the economy. In circulation are certificates in non-documentary form. In fact, this same share, which confirms the owner’s contribution to the property of the enterprise, is recorded on the fact of transfer by entries in the registers.