Securities are documents that meet the requirements established by law and certify obligations and other rights, the exercise or transfer of which is possible only upon presentation of such documents (documentary securities).

Securities are also recognized as obligations and other rights that are enshrined in the decision on the issue or other act of the person who issued the securities in accordance with the requirements of the law, and the exercise and transfer of which are possible only in compliance with the rules for accounting for these rights in accordance with Article 149 of this Code ( uncertificated securities).

The Civil Code divides securities into the following types:

bearer (bearer securities);

order;

named.

Bearer is a certificated security for which the person authorized to demand execution under it is recognized as its owner.

Warrant is a certified security for which the person authorized to demand execution on it is recognized as its owner if the security is issued in his name or transferred to him from the original owner through a continuous series of endorsements.

Nominal is a certificated security for which the person authorized to demand execution on it is recognized as one of the following specified persons:

1) the owner of the security, indicated as the copyright holder in the records maintained by the obligated person or a person acting on his behalf and having the appropriate license. The law may provide for the obligation to transfer such records to a person who has the appropriate license;

2) the owner of a security, if the security was issued in his name or transferred to him from the original owner in a continuous series of assignments of claims (cessions) by making personal endorsements on it or in another form in accordance with the rules established for the assignment of claims (cessions).

Main securities used by commercial banks:

A) Promotion- an issue-grade security that secures the rights of its owner (shareholder) to receive part of the profit of the joint-stock company in the form of dividends, to participate in the management of the joint-stock company and to part of the property remaining after its liquidation. A share is a registered security.

Common (or ordinary) are the most typical type of shares, since every joint stock company has ordinary securities. Common shares certify the rights of their owner (shareholder) to receive profit based on the results of the JSC's activities in the form of dividends or by calculating the market value, to manage the company's policy, including through voting at the general meeting of shareholders, to receive a share of property

Preferred (pref) equity securities differ from the first type primarily in that, as a rule, they do not provide their holder with voting rights at a meeting of shareholders.

Other types of shares:

• To bearer

b) Bond- an issue-grade security that secures the right of its owner to receive from the issuer a bond within the period specified in it, its nominal value or other property equivalent. A bond may also provide for the right of its owner to receive a fixed percentage of the nominal value of the bond or other property rights. The yield on a bond is interest and/or discount.

The main difference between a bond and a stock is that a bond is a certificate of debt, and a stock is a certificate of ownership. By purchasing shares, an investor becomes the owner of the company, and by purchasing bonds, he becomes a creditor.

Bonds can be classified according to various criteria. The most common of them - depending on the issuer: state, corporate, foreign. The classification of bonds depending on their maturity dates is also popular: short-term, medium-term and long-term.

Since a bond is a debt instrument, it is usually issued to attract loan capital, that is, to provide financing on a fee basis, for a certain period, for a specific purpose and with obligations to repay the principal amount and a fee for its use. This also fundamentally distinguishes bonds from stocks. Bonds can be issued with or without collateral.

V) Bill of exchange- a written promissory note of the form established by law, issued by the borrower (issuer of the bill) to the creditor (holder of the bill), giving the latter the right to demand from the borrower payment by a certain date the amount specified in the bill.

In addition to securities, commercial banks are actively mastering the work with derivative financial instruments:

Forward contract- a contract for the purchase and sale (supply) of any asset at some time in the future, all terms of the transaction are agreed upon at the time of conclusion.

Futures contract- This is a form of forward contract permitted to be concluded on an exchange. This is a standard exchange agreement for the purchase and sale of an exchange asset at a certain time in the future at a price agreed upon at the time of the transaction.

Option- this is a standard purchase and sale agreement for an exchange-traded asset, according to which its holder receives the right to buy/sell this asset at a certain price before a specified date in the future or on this date, with the payment of a certain amount of money to the subscriber for the right received, called a premium.

Swap- a contractual structure on the basis of which the parties exchange their obligations: assets, and/or fixed payments associated with them (the most common option is interest payments) over a certain period.

The bank's own borrowed capital is formed on the basis of the issue of shares and bonds.

Among bank shares, ordinary shares are the most common. Preferred shares are issued quite rarely; the volume of their issue is limited to 25% of the bank's authorized capital.

Bank bonds in Russia are even less popular than preferred shares, although in world practice bank bonds occupy a significant place in the financial market. For example, in Germany, banks issue the largest number of bonds, a significant part of which is secured by collateral or government guarantees.

At the primary level, it is worth saying that there are two types of securities:

Securities.

Bearer securities.

Definition 1

A security is a type of document necessary to indicate the property rights of its owner.

Definition 2

A bearer security is a form of security that does not require registration, since when exercising any rights, it is impossible to identify the owner, because the name of the owner is not indicated in such a security.

That is, their difference lies in the identification of the owner.

What types of securities are there?

Article 143 of the Civil Code of the Russian Federation includes securities: bonds, government bonds, bills of exchange, shares, checks, deposit and savings certificates, bearer bank savings books, bills of lading, privatization securities and other documents that are required by securities laws or as established they are classified as securities.

Let's look at the concept of each paper.

Definition 3

A bond (from Latin “obligation”) is a debt and issue paper that secures the rights of the owner to receive bonds from a legal entity or state executive or local authority (issuer) within a certain period of its nominal value and a fixed percentage of the cost or other property equivalent .

Definition 4

A promissory note is a debt obligation that gives the owner the right to demand, upon the arrival of a specified period, from the person who issued or accepted the obligation, payment of the agreed amount.

Definition 5

Shares are a type of security that indicates the right to receive part of the profit of a joint-stock company in the form of dividends by the owner or shareholder, this in turn gives the right to participate in and manage the joint-stock company, part of the property remaining after its liquidation.

Definition 6

A check is a security that obliges the payment of a specified amount to the check holder.

Definition 7

Certificates of deposit (savings) are a type of security indicating the deposit of funds by a commercial or savings bank on a bank deposit. There is also a regulation on the return of the deposit and interest upon expiration of the established period.

Definition 8

Bank savings book is a document confirming the owner’s right to receive a deposit and interest.

Definition 9

Bills of lading are an agreement on the conditions of carriage of goods, a type of distribution document. The purpose is to provide the owner with the right to dispose of the cargo.

Definition 10

Warehouse receipts are a type of security that represents a concluded agreement on the storage and acceptance of goods for storage. While the goods are in storage, the holder has the right to dispose of them as he wishes.

Definition 11

A pledge certificate, or warrant, is a security issued by a warehouse. It confirms ownership of the goods in the warehouse. It also gives the owner the right to purchase shares and bonds of any company within a certain period at a set price.

Definition 12

Privatization securities, or vouchers, are a type of security that gives the right to privatize state property.

Definition 13

An option is a contract in which one party has the right, within a certain period, to sell/buy an asset from the other party at the price specified in the contract, with payment of the so-called premium.

Definition 14

A futures contract, or futures, is a contract that obliges the purchase and sale of an exchange asset within a specified period, at a specified price.

Definition 15

A deposit receipt is a type of security in the form of a bank certificate of indirect ownership of shares of foreign companies. It is kept on deposit with the bank of the country where the issuer is registered.

Definition 16

Mortgage is a document pledging property. For example, a mortgage.

In order not to get confused in concepts, functions, and definitions, we have systematized the basic approach to the classification of securities. This is necessary, as it gives an understanding of the structure of the organization of the securities market and their processes in Russia.

Bearer papers can be classified according to the following criteria:

• discharge;

government bonds;

bonds;

• certificates of deposit and savings;

  bearer bank savings books;

  single and double warehouse receipt;

  bills of lading;

• privatization papers.

By organizational and legal affiliation:

groups of government securities;

groups of corporate securities.

By method of issue registration:

emission (security that includes the issuer's sequential actions towards the issue and placement of a series of securities);

non-emission.

The classification by class and method of release can be reflected in this diagram (Fig. 1)

Picture 1.

By function:

debt (repayment of the debt amount by the appointed date with payment of interest);

equity (determining the investor’s share in capital);

payment (securities serving as official means of payment);

title of title (intended to service the circulation of goods);

derivatives (uncertificated form that arises in connection with price changes);

collateral.

The classification by function is shown in the following diagram (Fig. 2)

Figure 2.

By method of transfer of ownership:

registered (debt and equity securities, except bank books, payment, documents of title, options, certificates, mortgages and warehouse receipts);

bearer (all securities that can be circulated on the territory of the Russian Federation. Exception: deposit, savings certificates, option, warehouse and mortgage certificates);

order documents (include payment and title documents).

Note: they differ from each other in the order of transfer of rights; some forms of securities can be two or three types at the same time. (Fig.3)

Figure 3.

Registered securities:

Plus, the documents can simply be transferred to the new owner. The person who sold the paper is responsible for it only if it turns out to be counterfeit. In this case, all claims are made against the issuer.

The registration of a transaction for the transfer of registered paper can be carried out in two ways:

transfer of rights from the moment of making an entry in the securities account of the new owner;

transfer of rights from the moment an entry is made in the personal account of the new owner, that is, through the register.

Transfer of registered paper to the new owner:

accordingly, either through the register - from the moment of receipt of the security certificate after recording on the personal account;

or through a securities account - from the moment of entry into the securities account.

Order securities:

The transfer of rights to order papers is carried out by transfer of an inscription, or by endorsement. With this type of transfer, only the signature of the seller of the security (endorse) is sufficient. He is also responsible for rights and implementation.

By application deadline:

short-term (up to a year);

long-term (from one to five years);

long-term (more than five years).

According to the form of receipt:

interest with constant and variable income;

coupons;

discount;

winning;

dividend.

By release form:

bearer securities in documentary form (all that are admitted to circulation on the territory of the Russian Federation);

bearer securities in uncertificated form (government bonds, bonds, shares). Note: shares in the Russian Federation are issued only in uncertificated form.

Definition 17

A documentary form is a type of issue-grade securities where the owner is identified on the basis of a security certificate or on the basis of an entry in a securities account.

Definition 18

Non-documentary form is a type of equity securities where the owner is identified on the basis of an entry in the register or on the basis of an entry in a securities account.

These two definitions are spelled out in the federal law “On the Securities Market”. From the analysis and systematization of the above classifications, we can draw the following conclusion: we examined classifications according to certain characteristics and types.

Listed, hybrid and redeemable securities

The following group of types of securities is provided by other specialists in this field. After all, it often happens that we classify one phenomenon in different ways, and there is simply no clear structure.

Definition 19

Securities are divided into:

listed security - equity or debt documents that are traded on an official stock exchange;

hybrid security – securities that have the properties of equity and debt financial instruments;

redeemable security – equity and debt securities. They are repaid when certain conditions are met or upon expiration. To make it clear, let’s look at an example: the subject is preferred shares (shares that have a number of rights, but at the same time certain restrictions are imposed on them). Over time, they must either be converted or purchased by the issuer. This share has no voting rights, so it becomes like a bond.

In theory, classifications have types, and types, in turn, have subspecies. Let us consider the characteristics of securities in this vein (Table 1). These subtypes are determined by the peculiarities of the stock market and the legislation of a particular country.

Table 1

Classification feature	Types and subtypes of securities
Origin	Primary – assets that are based on instruments, but are not included in securities (shares, bills, etc.)
Lifespan	Fixed-term securities are securities that have a set lifespan (long-, medium- and short-term). Perpetual – securities that are not regulated by a term.
Forms of existence	Documentary and non-documentary forms
Nationality	Domestic and foreign
Type of use	Investment or capital documents are the object of capital investment (shares, futures contracts, etc.) Non-investment securities are a type of securities that serve monetary settlements in commodity or other markets (bills, checks, bills of lading).
Tenure	Bearer securities – all securities that can be circulated on the territory of the Russian Federation. Exception: deposit, savings certificates, option, warehouse and mortgage certificates. Registered – debt and equity securities, except bank books, payment documents, documents of title, options, certificates, mortgages and warehouse receipts. Orders – include payment and title documents.
Release form	Emission - securities that involve the issuer's sequential actions towards the issue and placement of a series of securities. Non-equity – securities issued individually or in small series.
Type of ownership	State Non-government - securities issued by corporations (companies, banks, organizations) and individuals.
Classification feature	Types and subtypes of securities
Nature of appeal	Market, or freely traded Non-marketable – circulation is limited, the security cannot be sold to anyone other than its issuer within the specified period.
Risk level	Risk-free and low-risk, risky
Availability of income	Income and non-income
Investment form	Debentures are bearer securities that have a fixed interest rate and are endowed with an obligation to repay the debt within a specified period (bonds, bank certificates, etc.). Owner's shares - documents that give ownership of the relevant assets (shares, bills of lading, etc.)
Economic essence (type of rights)	Shares, bonds, bills, etc.

In addition to this, there is another classification based on characteristics:

By element:

government;

• mixed;

By degree of protection:

upscale;

low class.

By release form:

documentary;

non-documentary.

By validity period:

• unlimited

• presentative.

By the scope of rights granted:

with property rights;

with management rights;

with lending rights.

By territory of circulation:

municipal;

government;

foreign;

all-Russian.

By form of income:

constant;

spot.

If exchange is possible:

convertible;

non-convertible.

Definition of N

Classification is the ordering and division of things into varieties according to important characteristics.

All the classifications we have considered have common features, but at the same time some new element is observed in each.

Categories of securities

legal;

economic.

From the point of view of the legal category, a security has the rights:

ownership of a security;

certification of property and mandatory rights;

management right;

proof of transfer or receipt of property.

From the point of view of the economic category, a security has the following properties and characteristics:

liquidity;

profitability;

reliability;

presence of independent circulation;

potential for increase in exchange rate value

Knowledge of the different classifications of characteristics and types of securities is paramount. All practice is based on a knowledge base. This article helps to competently compile analytical accounting of transactions, monitor the movement of transactions, and effectively use them in circulation on the securities market.

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Securities are monetary documents confirming the fact that their owner has deposited funds, give the right to receive one-time or regular income, to return funds invested in the purchase of a security, and also confirm a loan relationship or co-ownership relationship.

A security has several values:

· par value - the value of a security indicated on its form or stipulated by the terms of issue. Calculated as the ratio of the authorized capital to the number of securities in circulation;

· issue price - the cost of a security at which it is sold to the first owner. It is the sum of the par value and the issue premium. For shares, the par value and issue value are the same or the issue value may be higher than the par value;

· market value - the value of a security on a specific date, determined based on supply and demand on the secondary securities market, that is, the stock price;

· book or book value - the book value of own property per one issued security. It is the ratio of the enterprise's equity capital to the number of securities in circulation.

The main indicator reflecting profitability and market value is the security rate. It is calculated as the ratio of the market value to the par value, or the market value of the reporting year to the market value of the base year, when the security has been traded on the market for several years.

One of the main indicators characterizing the investment attractiveness of a stock is the yield of securities. Profitability is calculated by the ratio of the amount of income on securities to the amount of expenses for their acquisition. The yield of securities is determined in percentage terms. Profitability can be current or final.

Current yield - the ratio of income received for a certain period to the amount of expenses for its acquisition.

Final yield - the ratio of income received on a security from the moment of its acquisition until the moment of its redemption by the issuer or sale to a third party to the amount of expenses for its acquisition.

Main properties of securities:

· negotiability – the ability of securities to be bought and sold on the market or to act as an independent payment instrument, to be the object of collateral as material assets;

· accessibility for civil circulation – the ability to perform all types of transactions in accordance with the status of a given security;

· standardization - securities must have a standard design and content, transactions with them also have a standard procedure. Such norms are most often established by the state;

· serialization – the possibility of issuing most securities in homogeneous series with their sequential sale;

· documentation. The fact of issuing securities means that the issuer assumes documented obligations in accordance with the terms contained in the information about the issue (or in another document) in accordance with applicable regulations or set forth in the security itself. The uncertificated form of securities issue implies the application of similar rules;

· regulation and recognition by the state means that the main function of government bodies in this area of ​​activity is regulation of the basic rules for the issuance and circulation of securities, licensing (if necessary) and control over the activities of all market participants;

· marketability - reflects their characteristics as a unique product that has its own specialized markets with their inherent organization, operating rules, infrastructure, information systems, etc. As a result, securities are a certain form of investment or an object of short-term speculation;

· yield of securities. One of the main reasons for investing in securities is the possibility of generating income from owning or trading in these assets. This stimulates the activities of all participants in the securities market;

· liquidity of securities reflects the possibility, in a developed stock market, of their immediate sale with simple procedures for registering these transactions;

· risk. When dealing with securities, it is imperative to take into account their inherent risk, characterized by the likelihood of partial or complete loss of capital and expected income. There are methods for calculating, predicting and reducing probable risk;

· mandatory performance means that the parties involved in transactions with securities undertake in advance the obligation to fulfill all the conditions agreed upon when issuing and selling these securities. Control over execution should be provided by the state or other organizations (for example, the stock exchange);

· the lifespan of securities is determined by the terms of their issue and can be with a specific circulation period, after which they are redeemed and lose their functions (for example, bonds) or without specifying a specific circulation period (for example, shares). In the latter case, the securities exist as long as the issuer operates.

Features of the security include:

· a security can express both ownership and credit relations;

· a security may provide the right to receive income or the obligation to pay income;

· without having its own value, the security reflects the value of the real capital invested in the issuer’s enterprise;

· securities can act as means of payment or as an object of collateral.

Types of securities:

1. According to the rights claimed, securities are divided into registered, bearer and order.

Registered security – the transfer of ownership of registered securities is subject to mandatory registration in the register of owners of registered securities, which is maintained by a depository institution, registrar or issuer of securities.

If registered securities are issued in documentary form, the name of the new owner is indicated on the form or certificate of the securities.

Bearer security – are freely circulated, and all rights under them are transferred to the new owner through personal endorsement.

Order security – the owner can present the rights himself or transfer them by endorsement, without registration in the register of owners (bill).

2. According to the form of issue, there are documentary and non-documentary forms of securities.

Documentary form – provides for the issuance of forms of securities indicating the nominal value, information about the issuer (with the necessary means of protection).

The book-entry form does not provide for the issuance of blank securities, and the securities are circulated in the form of an entry in the accounts of the depository institution.

3. By subject.

Government securities – debt securities, the issuer is the state represented by the government. These include government bonds. In accordance with the Law of Ukraine “On Joint Stock Companies” in Ukraine, shares are issued only in uncertificated form.

Local government securities are municipal debt securities, that is, bonds of regional and city governments.

Corporate securities – debt (bonds) and equity (shares) securities of business companies can be issued by state and non-state enterprises.

4. By method of circulation.

Market – securities that can be freely traded on the securities market. For example, corporate and government stocks and bonds.

Non-marketable. An example is the shares of the founders of investment funds.

Securities with a limited circulation. These include shares of closed joint stock companies.

5. By timing:

· perpetual – the circulation period of which is not limited (shares);

· short-term – up to 1 year;

· medium-term – from 1 year to 3 years;

· long-term – more than 3 years.

6. By method of income payment:

· discount – placed at a price below the par value, and redeemed by the issuer at the par value. The difference between the issue price and the face value is called a discount and constitutes the investor's income. If the issue price exceeds the face value, the security is placed at a premium;

· interest-bearing securities - income on them is paid in the form of interest stipulated by the terms of issue of securities (interest-bearing bill);

· mixed-type securities – interest-bearing securities placed at a price different from their nominal value;

· papers with non-guaranteed income , for example, common shares.

7. According to the degree of security of funds invested in securities:

· unsecured securities – the return of invested funds is ensured by all of the issuer’s property;

· secured securities – the return of invested capital is ensured by the issuer's collateral property as a matter of priority.

8. Regarding the resulting property rights:

· property (equity) securities give the right to part of the property of the enterprise and the status of its co-owner;

· debt securities provide the owner with the status of a creditor in relation to the issuer of the securities;

· derivative securities – give the right to conduct future transactions with other securities on the terms fixed at the time of purchase of derivative securities.

9. By groups of securities.

Unit (equity) securities:

· share – a perpetual security that confirms equity participation in the authorized capital of a joint-stock company and gives the right:

a) to manage a joint stock company;

b) to receive part of the net profit in the form of dividends;

c) to receive part of the property of the joint-stock company in the event of its liquidation.

· investment certificate – a security issued by a mutual investment fund, confirming the deposit of funds and giving the right to receive dividends based on the results of the investment fund’s activities at a price exceeding the price of its placement;

Debt securities:

· bond – a fixed-term security confirming the deposit of funds by its owner and confirming the issuer’s obligation to reimburse the face value of the bond with the payment of the interest specified in it;

· treasury bonds – bearer securities placed on a voluntary basis among the population, certifying that their owner has contributed funds to the budget and giving the right to receive financial income;

· savings (deposit) certificate - a written certificate from the bank about the deposit of funds into a deposit account and giving the right to receive the amount of the deposit and interest on it after the end of the deposit period;

· bill of exchange – a security certifying an unconditional monetary obligation to pay after the expiration of the term the amount specified by the bill of exchange and interest on it.

Mortgage-backed securities are securities whose issue is secured by a mortgage.

Privatization securities – reflect the owner’s rights to receive free of charge, during the privatization process, part of the property of state enterprises, state housing stock, and land stock.

Commodity securities – provide the right to dispose of the property specified in these documents.

Derivative securities are futures contracts for future transactions with securities of a given issuer within the circulation period of these contracts.

10.By types of markets on which securities are traded:

· monetary securities (short-term bills, bonds, certificates of deposit);

· capital securities – funds from the issue of these securities form or increase long-term capital.

The commodity world is divided into two groups: actual goods (services) and money. Money, in turn, can simply be money and capital, that is, money that brings in new money. There is always a need to transfer money from one person to another. Markets have developed two main ways of transferring money - through the process of lending and through the issuance and circulation of securities.

Securities are not money or material goods. Their value lies in the rights they give to their owner. The latter exchanges his goods or his money for securities only if he is sure that this paper is no worse, and even better, than the money or goods themselves.

A security is a special product that circulates on a special, its own market - the securities market, but has neither real nor monetary consumer value, that is, it is neither a physical product nor a service. In an expanded sense, a security is any document (paper) that is bought and sold at an appropriate price.

A security is a document that expresses the property and non-property rights associated with it, can independently circulate on the market and be the object of purchase and sale and other transactions, and serves as a source of regular or one-time income. Thus, securities act as a type of monetary capital, the movement of which mediates the subsequent distribution of material assets.

The Civil Code of the Russian Federation contains the classic definition of a security. “A security is a document certifying, in compliance with the established form and mandatory details, property rights, the exercise or transfer of which is possible only upon presentation.”

The security must contain the mandatory details required by law and comply with the requirements for its form, otherwise it is invalid. The details of a security can be divided into economic and technical. Technical details - numbers, addresses, seals, signatures, names of service organizations, etc. Economic details: form of existence (paper or paperless), period of existence, affiliation, obligated person, nominal value, rights granted.

The characteristics of a security are:
1. Documentation - a security is a document, that is, a record officially compiled by an authorized person in accordance with the details that has legal significance.
2. Embodies private rights. A security is a monetary document that can express two types of rights: in the form of the title of the owner and as a ratio of the loan of the person who owns the document to the person who issued it.
3. Necessity of presentation - presentation of a security is mandatory for the exercise of the rights enshrined in it.
4. Negotiability - a security can be the object of civil transactions.
5. Public reliability - in relation to the owner of a security, the person obligated under it can only raise such objections that arise from the content of the document itself.
6. A security is documentary evidence of the investment of funds. Thanks to it, monetary savings become material objects.

CLASSIFICATION OF SECURITIES

Classification of securities is their division into types according to certain characteristics that are inherent to them. In turn, species can in some cases be divided into subspecies, and these are even further apart. Each lower classification is part of one or another higher classification. For example, a share is one of the types of securities. But a share can be ordinary or preferred. An ordinary share can be single-voted or multi-voted, with or without par value, etc.

Securities can be classified according to the following criteria:
1. By duration of existence: fixed-term (short-term, medium-term, long-term and revocable) and unlimited.
2. By form of existence: paper (documentary) or paperless (undocumented).
3. By form of ownership: bearer (bearer securities) and registered, which contain the name of their owner and are registered in the register of owners of this security.
4. According to the form of appeal (order of transfer): transferred by agreement of the parties (by delivery, by assignment) or order (transferred by order of the owner - endorsement).
5. By form of release: emission or non-emission.
6. By registration: registered (state registration or registration of the Central Bank of the Russian Federation) and unregistered.
7. By nationality: Russian or foreign.
8. By type of issuer: government securities (these are usually various types of bonds issued by the state), non-government or corporate (these are securities that are issued by companies, banks, organizations and even individuals).
9. By negotiability: market (freely circulating), non-market, which are issued by the issuer and can only be returned to him (cannot be resold).
10. By purpose of use: investment (the goal is to generate income) or non-investment (serve turnover in commodity markets).
11. By risk level: risk-free or risky (low-risk, medium-risk or high-risk).
12. Based on the availability of accrued income: non-income or income-generating (interest, dividend, discount).
13. At face value: constant or variable.
14. By the form of raising capital: equity (reflecting the share in the authorized capital of the company) and debt, which are a form of borrowing capital (cash).

TYPES OF SECURITIES

Securities are divided into 2 classes: basic securities and derivative securities (derivatives).

Basic securities are securities based on property rights to any asset, usually to goods, money, capital, property, various types of resources, etc. Such securities include: shares, bonds, bills of exchange, bank certificates, bills of lading , check, warrant, mortgage, shares of mutual funds and others.

Basic securities can be divided into primary and secondary.
1. Primary is based on assets, which does not include the securities themselves (asset-backed). This is, for example, a stock, a bond, a bill, a mortgage.
2. Secondary - these are securities for the securities themselves: warrants, depositary receipts, etc.

Promotion is a security issued by a joint-stock company and securing the rights of its owner (shareholder) to receive part of the profit of the joint-stock company (JSC) in the form of dividends, to participate in the management of the joint-stock company and to part of the property remaining after its liquidation. Generally, shares are divided into two groups: common shares and preferred shares.

Bond is a security that is a debt obligation to return an invested amount of money after a specified period with or without payment of a certain income. If a bond is issued by the government, then such a bond is called a government bond. If local governments - then municipal. Legal entities also issue bonds: banks - bank bonds, other companies - corporate ones.

Bill of exchange(from German Wechsel - exchange) - a security in the form of a long-term obligation, drawn up in writing in a certain form, certifying an unconditional obligation of the drawer (promissory note), or an offer to another payer specified in the bill (bill of exchange) to pay upon the due date a bill of exchange for a specified amount of money.

Bank certificate- a security that is a freely negotiable certificate of a monetary deposit (deposit for legal entities, savings for individuals) in a bank with the latter’s obligation to return this deposit and interest on it after a specified period in the future.
A bearer bank savings book is essentially a type of bank certificate (along with deposit and savings certificates).

Bill of lading- a security, which is a document of a standard form accepted in international practice, which contains the terms of the contract for the carriage of goods by sea, certifying its loading, transportation and the right to receive it. Types of bills of lading: liner, charter, shore and onboard.

Check- a security document certifying a written order from the drawer of the check to the bank to pay the check holder the amount of money specified in it during the period of its validity. The drawer of the check is a legal entity that has funds in the bank, which it has the right to dispose of by issuing checks, and the holder of the check is the legal entity in whose favor the check is issued. Checks come in the following types: personal, order and bearer.

Warrant– a) a document issued by the warehouse and confirming ownership of the goods located in the warehouse; b) this is a security that gives its owner the right to buy from a given issuer a certain number of its shares (bonds) at a price set by it during a period of time specified by it.

Mortgage- this is a registered security that certifies the rights of its owner in accordance with a mortgage agreement (real estate pledge) to receive a monetary obligation or the property specified in it.

Investment share- a registered security certifying its owner’s share in the ownership of the property constituting a mutual investment fund.

Depository receipt- this is a security indicating ownership of a certain number of shares of a foreign issuer, but issued for circulation in the investor’s country; This is a form of indirect purchase of shares of a foreign issuer.

A derivative security or derivative is a non-documentary form of expression of a property right (obligation) arising in connection with a change in the price of the underlying exchange asset. Derivative securities include: futures contracts (commodity, currency, interest, index, etc.), freely traded options and swaps.

futures contracts(commodity, currency, interest, index, etc. - obligations to buy or sell a product at a certain time in the future at a price set today). The conclusion of a futures contract is not a direct act of purchase and sale, i.e. the seller does not give his goods to the buyer, and the buyer does not give his money to the seller. The seller undertakes to deliver the goods at the price fixed in the contract by a certain date, and the buyer undertakes to pay the corresponding amount of money. To guarantee the fulfillment of obligations, a deposit is made, kept by the intermediary, i.e. organization conducting futures trading. The futures become a security and can be repurchased many times during its entire validity period.

Option- this is a security, which is a contract, the buyer of which acquires the right to buy or sell an asset at a fixed price within a certain period or refuse the transaction, and the seller undertakes, at the request of the counterparty for a monetary premium, to ensure the exercise of this right. An option gives the right to choose, which is what gave this security its name. An option, unlike a futures contract, gives the acquirer a right, not an obligation. Options are exercised if they are cash options at the time of exercise.

Swaps represent an agreement between two parties to conduct a future exchange of underlying assets or payments for these assets in accordance with the terms specified in the contract. Swaps can be currency, interest rate, stock (index) and commodity.

Swaps have a number of significant advantages for investors, the main one of which is the ability for investors to reduce currency and interest rate risks, make a profit on the difference between interest rates in different currencies, and reduce the costs of managing a securities portfolio.

All types of swaps are over-the-counter contracts, they are not traded on an exchange and their liquidity is provided by special intermediaries - banks (often called swap banks) and dealers. The peculiarity of these types of derivative securities is that their circulation is not regulated by the state; the main place in the swap market is occupied by banks participating in these transactions.

PROPERTIES OF SECURITIES

A security is a form of existence of capital, different from its commodity, productive and monetary forms, which can be transferred instead of itself, circulate on the market as a commodity and generate income. Properties of securities:
1. Tradability – the ability to be bought and sold on the market, and in many cases to act as an independent payment instrument.
2. Availability for civil circulation – the ability of a security to be the object of other civil transactions.
3. Standard and serial.
4. Documentation - a security is always a document, and as a document it must contain all the mandatory details provided for by law.
5. Regulatory and state recognition.
6. Marketability - inextricably linked with the corresponding market and are its reflection.
7. Liquidity - the ability of a security to be quickly sold and converted into cash.
8. Risk – the possibility of loss associated with and inevitably inherent in investments in securities.
9. Mandatory performance.
10. Profitability - characterizes the degree of realization of the right to receive income by the owner of the security.

FUNCTIONS OF SECURITIES

Securities perform a number of socially significant functions:
1. They have a clear information function and indicate the state of the economy. Stable securities prices or their increase, as a rule, indicate a normal economic situation.
2. They play an important role in the flow of capital between different spheres of the economy (redistribution function).
3. Used to mobilize temporarily free cash savings of citizens (mobilizing function).
4. Used to regulate money circulation (regulatory function).
5. Banks, enterprises and organizations use securities as a universal credit and settlement instrument (settlement function).

Issue of securities

An issue is a set of procedures established by law that ensures the placement of securities between investors. Its goal is to attract additional financial resources by the issuer on borrowed terms (in the case of issuing bonds) or by increasing the authorized capital (in the case of issuing shares), but this is done according to the rules and under the control of the state represented by its bodies regulating the securities market.

The issue is usually carried out by attracting professional stock market participants, called underwriters, who, under an agreement with the issuer, undertake certain obligations for the issue and placement of its securities for an appropriate fee.

From the point of view of priority, emissions are usually divided into primary and secondary. A primary issue occurs either when a business entity issues its securities for the first time, or when a security is issued for the first time by that entity.

Subsequent issue is the repeated placement of certain securities of a given commercial organization. According to the placement method, the issue can be carried out through distribution, subscription and conversion.

Conversion of securities

Conversion is the placement of one type of security by exchanging it for another under predetermined conditions. Participation in the conversion can only be taken by persons who, prior to its implementation, have ownership rights to the already placed securities. Conversion can be divided into the following types:
a) conversion of shares into shares with a higher par value,
b) conversion of shares into shares with a lower par value,
c) conversion of shares into shares with other rights,
d) conversion of bonds into shares,
e) conversion of bonds into bonds,
f) conversion of securities during the reorganization of commercial organizations.

Conversion of common shares into preferred shares of any type is prohibited. In addition, the legislation of the Russian Federation on securities does not provide for the possibility of converting shares into bonds, which in fact also means that such conversion is prohibited.

STOCKS AND BODS MARKET

The securities market is a system of economic relations between those who issue and sell securities and those who buy them. Participants in the securities market are issuers, investors and investment institutions. Enterprises that issue and sell securities are called issuers.

The stock market is an institution or mechanism that brings together buyers (demand providers) and sellers (suppliers) of stock values, i.e. valuable papers. The concepts of the stock market and the securities market coincide.

According to the definition, the goods traded on this market are securities, which, in turn, determine the composition of participants in this market, its location, operating procedure, regulatory rules, etc.

In a market economy, the securities market is the main mechanism for the redistribution of monetary savings. The stock market creates a market mechanism for the free, albeit regulated, flow of capital into the most efficient sectors of the economy.

Security in accordance with the Civil Code of the Russian Federation (Article 142) is a document certifying, in compliance with the established form and mandatory details, property rights, the exercise and transfer of which are possible only upon presentation. It should be taken into account that presentation in this case means not just demonstration of the presence of a physical carrier of a security, but proof of one’s ownership rights to the security. The definition of a security given in the Civil Code cannot be considered optimal.

There are quite a lot of different definitions of a security in the economic literature. The most accurate definitions are those that emphasize that these are documents that are title to property or the right to receive income and that these are documents confirming rights to real assets. The last definition is concise, but accurately reflects the essential concept of a security.

In order to give a complete description of such a category as a security, it is necessary to consider basic inherent in it properties :

• 1) a security indicates ownership of capital. Such securities include shares;
• 2) a security reflects the loan relationship between the investor (the person who purchased this security) and the issuer (the person who issued the securities). This type of securities includes bonds, bills, etc.;
• 3) the security gives the right to receive a certain income from the issuer;
• 4) securities in the form of shares give the right to participate in the management of the joint-stock company;
• 5) securities give the right to receive a share in the property of the issuing enterprise upon its liquidation.

One of the essential properties of a security is its ability to serve as a subject of purchase and sale on the stock market. Securities circulate freely or with some restrictions on the market, ensuring the transfer of capital from one issuer to another, as well as the extraction of profitability from an increase in market value, etc. It should be emphasized that a security can serve as collateral for obtaining a loan, as security for the fulfillment of obligations, and be the object of other civil relations.

It is the ability to circulate that distinguishes a security from other financial documents. For example, a loan agreement is purely individual and cannot be resold. If credit resources are attracted by issuing bonds, then the creditor who owns the bond can sell it to a third party in order to receive funds, if necessary, before the end of the circulation period of this security.

Let's consider the main types of securities:

Bonds. If we try to give a brief definition of a bond, we can note that a bond is a debt security that reflects the loan relationship between the investor and the issuer. Investors who purchase bonds are creditors. Issuers - these are enterprises, banks, government bodies that issue bonds - are borrowers.

Currently, bonds as a financial instrument are very widespread. According to experts, the global bond market is worth more than 36 trillion. dollars And surpasses the stock market in volume. The structure of the bond market by country is given in the table below.

Table 1 - Bond market structure at the end of 2003

The data presented in the table indicates that. That three countries (USA, Japan, Germany) account for more than 70% of the global bond market.

Issuers issue a variety of types and types of bonds, each of which has specific properties. Therefore, an investor must know the properties of each type of bond well enough to make smart decisions when purchasing specific bonds.

According to the method of securing bonds with specific property of the company, they are divided into mortgage and non-mortgage.

Mortgage (secured) bonds issued by an enterprise on the security of specific property available at this enterprise (buildings, machinery, equipment, etc.)

Non-mortgage (unsecured) bonds- These are direct debt obligations of the company that are not secured by any collateral.

Depending on the type of security, there are several types of mortgage bonds.

Mortgage are called bonds issued on the security of land or real estate. These bonds are the most reliable, since these objects do not lose value over time. Therefore, by mortgaging real estate, a company can attract financial resources in an amount close to the value of the collateral.

For bonds with variable (floating) collateral machines and equipment act as collateral. Materials. The term “variable” (floating) mortgage emphasizes that the value of property is subject to much greater fluctuations than land and real estate.

Bonds secured by securities secured by shares, bonds and other securities owned by the issuer. The value of the collateral is determined by the market price of these securities. Depending on the quality of the pledged securities, the amount for which bonds can be issued is determined.

As stated earlier, unsecured (mortgage-free) bonds are not secured by any collateral. Claims of holders of unsecured bonds are satisfied in accordance with the general procedure, along with the claims of other creditors. The actual collateral for such bonds is the general solvency of the company. As a rule, large and well-known companies with a high rating and a good credit history resort to issuing unsecured bonds. The name of these companies already serves as a money return guarantee.

Occasionally, young, rapidly progressing companies that do not have real physical assets that can serve as collateral resort to issuing unsecured bonds.

Depending on the method of earning income, there are different types of coupon and discount bonds.

Discount bonds are called bonds with zero coupon, i.e. no interest is paid on them, and the owner of the bond receives income due to the fact that the bond is sold at a discount, i.e. at a price below par.

Depending on the determination of the coupon value, bonds are distinguished With fixed and floating (variable) coupon.

Coupon bonds can be issued with a fixed interest rate, the income on which is paid continuously in an unchanged amount throughout the entire circulation period of the bond. Establishing a fixed interest rate is possible in a stable economy, when fluctuations in prices and interest rates are very small. In conditions of high and sharply changing interest rates, establishing a fixed nominal yield is fraught with high risk for the issuer. When interest rates fall, the issuer must pay investors income at the rate fixed when the bonds were issued.

Therefore, to avoid interest rate risk, issuers resort to issuing bonds with floating interest rates. This type of bond became widespread in the United States in the early 80s, when interest rates were quite high and tended to change. Under these conditions, companies preferred to issue bonds with a floating interest rate tied to some indicator reflecting the real situation in the financial market. Typically in the United States, floating rate obligations are tied to the yield on three-month Treasury bills. When issuing such bonds, the interest rate is set for the first three months, and then every three months the rate is adjusted depending on the yield on Treasury bills. The real interest rate on a particular company's bonds is made up of two components: a) interest rates on Treasury bills and b) an additional risk premium.

A special type is revenue bonds. The company is obligated to pay the owners interest income on these bonds only if it makes a profit. If there is no profit, then no income is paid. Income bonds can be simple and cumulative. For simple bonds, the company is not required to repay unpaid income for previous years in subsequent periods, even if there is a sufficiently large profit. For cumulative bonds, interest income not paid due to lack of profit accumulates and is paid in subsequent years.

Indexed bonds. Indexed bonds are issued to protect the investor from depreciation of bonds due to inflation, changes in exchange rates, etc. Therefore, a distinctive feature of indexed bonds is that the amount of coupon payments and the nominal value of the bonds are adjusted by a special coefficient reflecting changes in the corresponding indicator (inflation rate, exchange rate dynamics, etc.). Indexed bonds first appeared in the 70s in the UK. These years were characterized by unstable rates of economic development and relatively high inflation. In order to protect investors' funds from depreciation, the British government issued indexed bonds, for which the amount of coupon payments and the face value of the bond were adjusted depending on the rate of inflation.

In Russia, indexed bonds were issued by some companies to alleviate the problem of currency risk. An investor, buying a bond for rubles, assumes the risk of depreciation of the national currency. Having held the bond until the expiration date, upon redemption he will receive an amount in rubles equal to the face value. If during this time the dollar exchange rate increases significantly, then the real return for the investor may turn out to be negative. Therefore, to successfully place bonds, enterprises must offer a financial instrument that would protect the owners of ruble bonds from the depreciation of the ruble compared to the dollar.

Callable bonds. By issuing bonds with a fixed coupon rate for a long period of time, the issuer bears interest rate risk associated with lower interest rates in the future. In order to insure themselves against losses when paying a fixed coupon income in the face of falling interest rates, companies resort to early redemption of their bonds. The right to early repurchase means that the company can repurchase bonds before the expiration of the officially established redemption date. In order to carry out such operations, the terms of the bond issue must stipulate the company’s right to early ransom

Russian legislation allows early redemption of bonds. However, unlike Western countries, in Russia early repayment of bonds is possible only at the request of their owners.

Bonds with partial early repayment. By issuing bonds with a lump sum maturity, the issuer will have to find a significant amount of cash on the redemption date to pay investors the face value of all redeemed bonds. To reduce the burden of lump sum payments, businesses resort to issuing bonds that are repaid gradually over a certain period of time. In this case, the company, simultaneously with the payment of the coupon, also repays part of the nominal value of the bond.

International bonds. To attract capital from foreign investors, enterprises enter international bond markets. There are various types of bonds traded on world markets. Basically, two groups can be distinguished among them: foreign and Eurobonds.

Foreign bond is a bond issued by a foreign company in the market of another country in that country's currency. The most attractive markets for issuers are the US, UK and Japan, where enormous financial resources are concentrated. If an issuer from another country wants to raise capital in the US market, it issues bonds in US dollars, registers a prospectus in accordance with US law, and places the bonds on the US market.

Eurobonds- these are bonds that are simultaneously placed on the markets of several European countries. The Eurobond market developed in the 60-70s and gained great popularity both among issuers and investors.

A distinctive feature of the Eurobond market is that the issuers are reliable borrowers whose reputation and creditworthiness are beyond doubt. Only in this case is there a guarantee of placement of the bond issue.

For companies, the Eurobond market is quite profitable, as it allows them to obtain cheap financial resources for the implementation of large investment projects.

Promotion - this is an issue-grade security that secures the rights of its owner (shareholder) to receive part of the profit of the joint-stock company in the form of dividends, to participate in the management of the joint-stock company and to part of the property remaining after its liquidation Federal Law “On the Securities Market” No. 39-F3 dated 04/22/96..

Enterprises created in the form of joint stock companies have the right to issue shares. A feature of joint stock companies is that their authorized capital is divided into parts and one share corresponds to one part of the authorized capital.

Depending on the stage of issue of shares into circulation and their payment, the following types of shares are distinguished: declared, placed, fully paid.

Announced shares- this is the maximum number of shares of the corresponding type that can be issued by the company in addition to the shares already placed. The number of authorized shares is fixed in the charter of the joint-stock company or adopted by a decision of the general meeting of shareholders by a qualified majority of votes (3/4) of the number of shares present.

In practice, a joint stock company may never issue the number of shares declared in the charter. The number of authorized shares is in no way related to the size of the authorized capital and may be more or less than its value.

Placed shares- These are shares that are purchased by shareholders. At the time of establishment of a joint stock company, all shares must be placed between the founders, i.e. During this period, open sales of shares cannot be carried out. In subsequent issues, shares that are sold to shareholders are considered placed. Only when shares are purchased by shareholders do they fall into the category of outstanding shares and are taken into account as part of the authorized capital.

Fully paid- these are placed shares for which their owner has made 100% payment and the funds have been credited to the accounts of the joint-stock company. Not all issued shares are fully paid, as payment of shares in installments may be provided. In particular, when creating a joint stock company, the founders can pay for shares in installments. Thus, the shares are placed and purchased by the founders, but may not be fully paid for.

Ordinary shares. In the formation of financial resources of joint stock companies, ordinary shares play a decisive role. Their share in the authorized capital of the company in accordance with Russian legislation cannot be less than 75%. In many companies, for example in JSC Gazprom, the authorized capital is formed only from ordinary shares.

By purchasing an ordinary share, an investor makes a permanent contribution to the authorized capital of the company. One of the main features of an ordinary share as a carrier of property rights is that. That the shareholder in most cases cannot demand that the JSC return the deposited amount to him. This is what allows the joint-stock company to freely dispose of its capital, without fear that part of it will have to be returned to shareholders at their request. An ordinary share is a perpetual security; it is not issued for a specified period. The life of a share ends only with the cessation of the existence of the joint-stock company. The most important property of ordinary shares is the right to vote when making decisions at shareholder meetings. According to Russian law, an ordinary share provides each shareholder with the same amount of rights, including the right to vote.

Preference shares. By issuing preferred shares, the company pursues the goal of attracting additional capital, which is reflected in accounting as equity. Preference shares in accordance with Russian legislation, along with ordinary shares, they form the authorized capital of a joint-stock company. The peculiarity of preferred shares is that these securities simultaneously have features inherent in both bonds and shares.

The owner of preferred shares, like the holder of bonds, has the right to priority receipt of income compared to persons holding ordinary shares.

Convertible securities

Convertible security - is a bond or preferred share that, under certain conditions, can be exchanged for a certain number of ordinary shares.

Only bonds or preferred shares are subject to conversion (exchange). Conversion rights and exchange terms must be provided for when these securities are issued and reflected in the prospectus. The mechanisms for converting bonds and preferred shares are very similar and have many common features. Therefore, we will look at how companies issue convertible securities and using bonds as an example.

Rights, warrants, depositary receipts, bills.

The legislation of most countries contains a provision on the ownership of ordinary shares preemptive rights for the purchase of additional shares of a new issue. The Russian system of stock market regulation also provides that shareholders have a preemptive right to purchase additional shares and securities convertible into shares placed through open or closed subscription. Thus, an investor who owns shares of a particular company, upon a new issue, has the right to purchase these shares in an amount proportional to the number of shares of a certain type owned by him.

Typically, ownership of one share gives one right. For that. To exercise this privilege, notices are sent to holders of common stock that they have the right to purchase additional shares of common stock in proportion to the number of shares they hold. The notice indicates the number of rights that the shareholder has, the validity period of the right, the price for exercising the right, i.e. at what price he can purchase additional shares of the new issue.

Warrants. Warrants are very close to rights in their mechanism of action and content. Warrant is a security that gives its owner the right to purchase, during a specified period of time, a certain number of ordinary shares at a pre-fixed price.

The difference between a warrant and a right is the validity period. If the right is a short-term security that operates on the market for 3-4 weeks, then the warrant is issued for a long period of time and is valid for 3-5 or more years.

Typically, warrants are sold along with bonds in order to make the bond issue more attractive to investors.

Depository receipt- this is a derivative (secondary) security freely traded on the stock market for shares of a foreign company deposited in a large depository bank that has issued receipts in the form of certificates or in book-entry form. In world practice, there are two types of depositary receipts:

• · ADR (American depositary receipt)- American depositary receipts that are admitted to circulation on the American market;
• · GDR (global depositary receipt)- global depositary receipts, transactions with which can be carried out in other countries.

Depositary receipts are divided into sponsored and unsponsored .

Unsponsored ADRs are issued at the initiative of a major shareholder or group of shareholders owning a significant number of shares in the company. The advantage of unsponsored ADRs is their relative ease of issuance.

Sponsored ADRs are issued at the initiative of the issuer. The issue of GDR is organized in the same way [, p. ].

Bill of exchange . A bill of exchange is not an issue-grade security; to issue it, it is not necessary to draw up an issue prospectus and register with the Federal Securities Commission. It is enough to make a decision at the level of the management of the enterprise, and the bill can be issued for circulation.

Bill of exchange- this is an unconditional debt obligation of the payer specified in the bill to pay a certain amount within the established time frame. The bill is one of the oldest securities used in world practice. Its origin dates back to the 12th century in connection with payments for goods on the Italian market, when money changers and bankers, along with traditional operations of exchanging money, issuing loans, etc., began to transfer funds from one country to another.

Government securities. The issue of government securities is aimed at solving the following tasks:

• · Covering the permanent state budget deficit;
• · Covering short-term cash gaps in the budget due to uneven tax revenues and expenses incurred;
• · Attracting resources for the implementation of large-scale projects;
• · Attracting resources to cover targeted government expenditures;
• · Raising funds to pay off debt on other government securities;

Therefore, depending on the purpose of release, they distinguish:

Debt securities to cover the constant state budget deficit that carries over from year to year. As a rule, medium- and long-term securities are issued precisely for this purpose and serve the systematic debt of the state.

Securities to cover temporary budget deficits(cash gaps), which are formed due to a certain cyclical nature of tax receipts and constant expenditures from the budget.

Target bonds, issued for the implementation of specific projects. For example. In Great Britain, the government issued transport bonds, as a result of which resources were generated for the nationalization of transport. In Japan, government issues of construction bonds are widely practiced for the implementation of large-scale programs for the construction of roads, etc. In Russia, such securities can be considered bonds of JSC “High-Speed ​​Railways”, which were issued under the guarantee of the Russian government; funds from the sale of these bonds were used for financing construction of the Moscow - St. Petersburg railway.

Securities intended to cover government debt enterprises and organizations. These types of securities were used quite widely in Russia in conditions of systematic non-payments, when enterprises did not pay to the budget, and the government could not pay for government orders. To solve this problem, the Ministry of Finance of the Russian Federation in 1994 - 1996 issued treasury bonds, carried out under government orders and financed from the federal budget.

The state in the stock market is not only the largest issuer, accumulating funds from private corporate investors to cover general government expenses, but also the largest operator of the stock market.