Securities market participants (United States)

Securities market participants in the United States include corporations and governments issuing securities, persons and corporations buying and selling a security, the broker-dealers and exchanges which facilitate such trading, banks which safe keep assets, and regulators who monitor the markets' activities. Investors buy and sell through broker-dealers and have their assets retained by either their executing broker-dealer, a custodian bank or a prime broker. These transactions take place in the environment of equity and equity options exchanges, regulated by the U.S. Securities and Exchange Commission (SEC), or derivative exchanges, regulated by the Commodity Futures Trading Commission (CFTC). For transactions involving stocks and bonds, transfer agents assure that the ownership in each transaction is properly assigned to and held on behalf of each investor. Supporting these transactions, there are three central securities depositories and four clearing organizations that assure the settlement of large volumes of trades. Market data consolidators inform investors and regulators in real time of the bid and offer prices of each security through one of two securities information processing systems. The basis for these transactions is controlled both through self-regulatory organizations and the two securities commissions, the SEC and the CFTC. This article covers those who deal in securities and futures in US markets. Securities include equities (stocks), bonds (US Government, corporate and municipal), and options thereon. Derivatives include futures and options thereon as well as swaps. The distinction in the US relates to having two regulators. Markets in other countries have similar categories of securities and types of participants, though not two regulators.