WHAT DO WE NEED TO KNOW ABOUT SECURITIES TRADING
The financial system is one of the most important subsystems of the country's economic system, which is determined by the state of political relations, the nature of ownership, the degree of economic and overall social development and a number of other factors. The financial system consists of a large number of financial institutions and participants such as the central bank, commercial banks, savings banks, microcredit and savings and loan associations, pension funds, investment funds, insurance companies, intermediary organizations and other, as well as accompanying financial instruments. The most important elements of the financial system are: financial markets, financial institutions and financial instruments.
The financial market consists of two basic forms, where the first is a narrower form and is related to a certain place, time, organization and a manner of functioning and we call it the stock exchange. The broader form of the financial market is related to all other places outside the stock exchange and refers to the supply and demand of various financial instruments, performing financial transactions and concluding financial transactions.
A stock exchange is a place where certain, precisely defined, subjects of trade are bought or sold according to pre-established rules. On the stock exchange, authorized stockbrokers trade in standardized market, according to previously known rules and on the basis of standardized documentation. The stock exchange, simply put, represents a specific place where supply and demand for goods, money, capital, financial derivatives, etc. meet. The role of the stock exchange consists, among other things, in providing conditions and ways of determining the unbiased price of stocks, which does not mean that stock prices are determined by employees of the stock exchange, but that the stock exchange provides equal conditions for meeting supply and demand for a particular stock and in ways applicable to all participants. The stock exchange enables trade in securities, money and goods in various parts of the world so that the subject of trade (standardized) is not physically present during the transaction. The development of information and communication technologies enables intercontinental trade, so that the location of the exchange's headquarters is irrelevant. Stock exchanges as institutions have a significant impact on the development of the entire economy.
The forerunners of today's stock exchanges are fairs that were organized in the Middle Ages in the port cities of Europe, primarily in Italy. The first monetary securities appeared in the 15th century. The development of the practice of issuing and trading, primarily in bills of exchange and bonds, conditioned the development of securities exchanges. The first recorded stock exchanges on ona global scale are: Securities Exchange in Antwerp - Belgium, 1460, Commodity Exchange in Paris, 1563, London Stock Exchange, 1563, New York Stock Exchange, 1796, with the fact that in 1817 it switched to location where it is still located today / Wall street 40 /. The first established stock exchange in the Balkans was the Belgrade Stock Exchange, in 1894, in the building of the inn then called „Srpska kruna“.
The Law on Securities Market has defined the basic terms that allow us to better understand the existence and functioning of securities trading:
"Issuer" is a person who issues securities for the purpose of raising funds and who has obligations to the owners of securities specified in the security.
"Owner" is a person who has ownership of a security on the basis of ownership (owner) or on the basis of a contract (nominated owner).
"Securities" is a transferable document in dematerialized form - an electronic record, issued in a series on the basis of which the owners exercise their rights towards the issuer in accordance with the law and the decision on the issue.
"Securities issued by public offering" are securities issued on the basis of the provisions of this Law, as well as shares from the procedure of privatization of state capital in companies and banks issued in accordance with the Law on Privatization of State Capital in Companies ("Official Gazette of Republika Srpska"). No. 54/05 - Cleansed text and 109/05) and the Law on Privatization of State Capital in Banks ("Official Gazette of Republika Srpska", No. 24/98, 5/99, 18/99 and 70/01). Securities issued by banks and insurance companies are also considered publicly issued securities.
"Issue of securities" is a set of actions taken by the issuer for the purpose of raising funds by selling securities to the first owners, with the obligation to fulfill the obligation contained in the security to each of them.
"Issue of securities by public offering" is an issue in which the subscription and payment of securities is made on the basis of a public invitation to an indefinite number of persons.
"Investor" is a domestic or foreign person who invests in securities.
"Securities trading" is the transfer of ownership rights to securities on the basis of a concluded transaction of sale, exchange, gift, lending and other legal transactions in accordance with this Law.
"Material non-poblic information" is any information that is not available to the public and is important for determining the price of securities.
"Manipulation of the securities market" is the creation of the illusion of active trade in the securities market through the purchase, ie sale or use of other means for the purpose of increasing or decreasing, supporting or destabilizing their market value.
"Authorized participant in the securities market" (hereinafter: authorized participant) is a legal or natural person who has a license from the Commission to conduct transactions with securities.
"Stockbroker" is a broker-dealer company or bank that has a license from the Commission to conduct transactions with securities in accordance with this law.
"Broker" is a natural person authorized to perform transactions with securities, which operate as an employee of a stockbroker.
"Investment advisor" is a natural person who advises when investing in securities, when buying or selling them and exercising their rights, and who acts as an employee of a stockbroker or other authorized participant in the securities market.
"Investment manager" is a natural person who, on the basis of a written contract with a client, takes over the management of a portfolio of securities in whole or in part and who operates as an employee of a stockbroker or other authorized participant in the securities market.
"Custody bank" in the sense of this law is a bank that has a license of the Commission to perform securities account management activities for the account of clients and to act on the client's order and which performs other activities in accordance with this law.
"Professional association" is a professional organization of authorized participants in the securities market and other persons who perform transactions with securities and which acts in accordance with the law and its own rules.
"Stock Exchange" is a legal entity that performs the activities of organizing trade in securities and financial derivatives, as well as other activities in accordance with this Law, and which has the permission of the Commission to perform those activities.
"Central Securities Depository" (hereinafter: the Registry) is a legal entity that performs the activities of a unique record of securities and owners of securities, the rights of securities, the rights of third parties on securities, accounting, settlement and transfer of securities and monetary liabilities and receivables arising from transactions with securities, as well as other transactions in accordance with this Law.
"Public company" in the sense of this Law is a company which, as an issuer of securities, has successfully executed at least one public offer of securities and to which the Commission has approved a prospectus for the issue of securities, ie a prospectus for listing securities, ie another regulated public market.
"Qualified participation" in the sense of this Law is any direct or indirect participation in a broker-dealer company, stock exchange or Register, which represents 10% or more of shares in the share capital or voting rights, or which enables significant influence on the management of a broker-dealer company , the stock exchange or the Register.
"Affiliated parties" in the sense of this law are natural and legal persons who are interconnected by ownership of capital or capital management or otherwise in order to achieve common business goals, so that business and business results of one person can significantly affect business or business results of another person.
