FAQs – Capital Markets Development

Q – What are securities?

Securities are instruments for raising capital by the stakeholders of a company.

Q – What are stock markets?

The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly held companies take place.

Q – What is the difference between Primary & Secondary Markets?

Primary markets refers to the market where securities are created. Companies sell new stocks and bonds to the public for the first time. Whereas, Secondary Markets is one in which they are traded among investors, in the stock market.

Q – What is the role of the Eswatini Stock Exchange?

The stock exchange is basically a market for long term capital through issuance of securities. It provides a link between economic agents in need of finance and investors seeking profitable investment opportunities. This process involves the issuing, listing and trading of securities. Companies that need finance would normally issue securities on the exchange and investors would buy them as an investment.

Q – What are Shares?

Shares are units of ownership interest in a corporation or financial assets that provide for an equal distribution in any profits, if any declared in the form of dividends.

Q – What is a Bond?

A Bond is a debt instrument that government or a company issues to raise money. By buying a bond, you are giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.

Q – What do financial advisors do?

A financial advisor helps you create strategies for eliminating financial risk and building wealth over the long term. They can give you a game plan that puts you on track to achieve your financial goals.

Q – What Is a Dealer?

Dealer means a person who buys and sells securities whether as principal or agent.

Q – What do Investment Advisors do for you?

Investment Advisors are regulated and supervised by the FSRA under the Capital Markets Development Division. Investment advisors are licensed to carry on the business of advising others concerning investments and to manage investments on behalf of clients in some instances. They select financial assets like stocks, bonds, and mutual funds and then buy, sell, and monitor them within your account in keeping with your investment goals. Investment advisers generally have discretionary powers over your account. By engaging them, you may give them general authorization to trade for you, without consulting you before each transaction.

Q – What is a Collective Investment Scheme?

Collective investment scheme means an arrangement where investors pool money to invest in assets, such as bonds, equities or cash. Your investment in a collective investment scheme is divided into shares, and the number of shares held represent your proportionate ownership of the collective investment scheme’s overall assets, and the return those assets may generate.

Q – What is a Collective Investment Scheme Manager?

Collective investment scheme manager means a person who is authorised to manage, operate or control a collective investment scheme.

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