A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year,[1][dead link] as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Securities and Exchange Commission (SEC), oversee the capital markets in their designated jurisdictions to ensure that investors are protected against fraud, among other duties.
Capital markets may be
classified as primary markets and secondary markets. In primary
markets, new stock or bond issues are sold to investors via a mechanism known
as underwriting. In the secondary markets, existing securities
are sold and bought among investors or traders, usually on a securities
exchange, over-the-counter,
or elsewhere.