Long-term financial instruments, with maturities beyond one year or no fixed maturity, through which companies and governments raise long-term capital from investors, regulated by SEBI.
- Equity shares give ownership and voting rights with no fixed return; preference shares carry a fixed dividend and rank ahead of equity in repayment.
- Debentures and bonds are debt instruments paying a fixed interest (coupon); the holder is a creditor, not an owner.
- The primary market is where new securities are issued (through an Initial Public Offering, IPO, or follow-on offer); the secondary market (stock exchanges such as the BSE and NSE) is where existing securities are traded.
- Derivatives (futures and options) and units of concept mutual funds are also capital-market instruments; depositories (NSDL, CDSL) hold securities in dematerialised form.
- The Securities and Exchange Board of India (SEBI), set up under the SEBI Act, 1992, is the regulator, in contrast to the RBI's hold over the money market.
The equity-versus-debt distinction, the primary-versus-secondary market split, and SEBI as the capital-market regulator are standard items.
Capital market (long-term, SEBI-regulated) versus money market (short-term, RBI-regulated); shares give ownership while bonds and debentures only create a creditor claim.
Long-term instruments (shares, bonds, debentures, derivatives) raised in primary and secondary markets; regulated by SEBI.