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The types of stock market
Each value is negotiated on its own market. This one depends on
the size of the society, of its market capitalization.
The Primary market
The Primary market, that used to be called «the official
list », represents the essential of the stock-exchange activity
and it is reserved to big firms, which need to fit precise criterion:
- the circulation of 25% of their capital.
- the introduction of an history of certified accounts of more
than three years old.
90% of transactions, all sectors mixed-up, are made within the
market.
The secondary market
Medium firms were able to access the stock exchange thanks to
the establishment of the secondary mark et in January 1983. Firms
wanting to get into the secondary market have to fulfil the following
conditions :
- Issuing at least 10% of its capital to the public.
- Introducing a history of the accounts of more than 2 years old.
We do not require the elaboration of an information memo aimed
by the SEC (Securities and Exchange Commission). All the negotiations
are made in cash.
After three years of stock-exchange activity, a firm of secondary
mark et can claim its transfer to the official list of the primary
mark et.
The New market
With the building up of the start up related to the new technology
«computing, biotechnology… »and the need of
these to find financing funds rapidly, the stock exchange created
the new market in 1996.
So the new mark welcomes young innovative societies with an increasing
powerful potential, and it enables to find an intermediary to
insure their funding. The new market is characterised by its big
flexibility. Listed firms have no obligation in terms of account
anteriority. The youngest of them can therefore get into it.
The marked is supervised by a specialized society, the New Mark
et Society (NMS).
The Free market
It was created in 1996 in order to enable too small firms that
can neither get in the primary market nor in the secondary market,
nor access the stock exchange. It is a specific mark and not regulated,
societies that want to access it have no transparency obligations
on the history of the accounts. The negotiations are made in cash,
on the demand of one of the shareholders, and thanks to negotiators
member of the Paris Bourse. The approach of this non regulated
market requires an attention and a particular cautious from the
individual shareholders’ part and it does not necessarily
have appropriated means of analysis.
Derivative markets
It is a mark where you can either fix a price and a quantity today
for a delivery at a later date, or it can fix a call or a put
at a price agreed in advance, and therefore have the right to
come out of a duty for a payment, today, of a bonus (option).
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