In the economy, the stock market is one of the key structures. The organizations that ensure its functioning issue instruments - securities. With their help, financial transactions between the parties are built. To understand the concept of “issuers of securities”, it is necessary to study their values separately. To consider this issue, we will find out what constitutes emission and what its directions are.
Emission: definition, varieties
The word emission comes from the Latin emission and translates as "issue". Considering the issue in the field of securities, this thesis is interpreted as "issuance". Emissions are made in several main areas, these are:
- cash issue;
- non-cash funds (loans, cash checks);
- valuable papers.
In Russia, it is legally established that the issue of money supply can only be carried out by a “monopolist” in the form of the Central Bank, the issue of which is the country's main currency, the ruble. No other currency will be issued. Also, the country does not provide for a “gold standard”, that is, money cannot be transferred to this precious metal and be its equivalent.
As for checks, deposits and other non-cash funds, their release can be initiated by other, commercially-directed banks. These funds include loans, interest deposits and other banking products. This type of output exceeds monetary in volume.
The issue of securities is accompanied by the distribution of shares, bond loans and other types of documents to their purchasers. The main objective of the issue is to attract investors. Consider this view in more detail.
Glossary of the terms “issuer” and “securities”
The term "issuer" also came from the Latin language and was designated as emittentis - issuing. They may be an enterprise, as well as a state or municipal authority. They should have the right to issue money and securities on their behalf. Issuers may be:
state authorities (also municipal branches of government);
banking institutions;
legal entities.
Securities include monetary or other documents that provide their owners with a certain income. Securities are divided into two main types:
Cash - government and other types of bonds, cash receipts and checks, bill documents.
Commodity - give their owners certain rights, such as ownership or property law. These documents are invoices for goods, bills of lading, as well as documents that confirm the right to store goods in a warehouse - warehouse certificates.
Shares, like securities with advanced functions, can be vested with both monetary and property types of rights. It is worth noting that securities can be objects to buy or sell.
What rights are given to issuers?
The basic right of the issuer of securities is the acquisition of income as a result of their turnover. An enterprise engaged in the circulation of securities may make sales in the stock market and receive income from its activities.
Also, such a legal entity has the right, in accordance with the law, to perform its tasks and basic functions within its competence. Securities and their issue are strictly regulated by law.
The specifics of the issue of securities
The state and non-state enterprises that organize the issuance of valuable documents carry out the main mission - to attract investor funds to fulfill any needs: this may be an investment project, or an increase in production volumes. In other cases, shares and bonds are issued for the accumulation of the organization’s authorized capital.
Securities can be issued by enterprises with a certain organizational form - AO (joint-stock company), LLC (limited liability company), etc. Their field of activity may be different.It is also authorized by state bodies. Stock markets in our country also use stocks, bond loans and other foreign-made securities.
Providing information from issuers
Information on the securities of issuers should be made publicly available, and should reflect all the necessary information, especially regarding issues that explain the reasons for the fluctuation of the exchange rate for these objects.
What information should be provided by legal entities - issuers of securities? Information disclosure includes annual and quarterly reporting, as well as timely notification of significant changes or changes that affect the functioning of the organization.
In addition, the issuing company must provide a list of persons who may influence their activities - the so-called affiliates. As a rule, these are the owners of the legal entity and their governing bodies, which are given the opportunity to dispose of more than 20% of the total number of voters.
Also, issuers operating on the securities market should publish all decisions regarding the issue of the enterprise, and summary reports on its results. The state, shareholders and auditors are entitled to request such information, and issuers are required to provide it.
The regulatory framework for the provision of information by issuers
Russian law establishes a requirement for issuers, in accordance with which they are obliged to inform about their activities. These norms are approved by the special Regulation on disclosure of information by issuers of securities and Law No. 39-ФЗ, which regulates the activities of organizations for the circulation of securities, and other regulatory acts of the Russian Federation.
The regulation approved by the Bank of Russia determines the basic procedure according to which issuers provide data on their activities. This document discloses such issues as the stages of issuing money and other securities, and approved reporting forms for accounting enterprises.
The effect of this provision is extended to the entire list of issuers: both Russian and international, issuing securities in Russia. An exception to them is the Central Bank and state and municipal authorities.
In addition to the general provisions, the regulatory act provides for separate requirements, for example, to the prospectus of a security. Also considered are the features of the disclosure of data of those issuers that issue bonds with mortgage loans.
What information does the issuer provide?
Of course, the disclosure of securities from issuers that sell shares in the public domain is a mandatory procedure. The report of organizations that bid on the stock market is best known. However, those organizations that issue securities for a limited circle of persons are also considered by law and are required to report on the results of their activities.
In federal law No. 39-FZ on securities, several types are approved for publication of information. The selection of a specific form is based on the number of requests and their type. Information should be publicly available on the web, in the media, in news channels and in economic publications intended for this.
The most influential enterprises engaged in emissions, independently provide all the necessary reports on their current activities. The transparency of such information and quick access to it are some of the most important aspects affecting the demand for the issuer's shares.
Security registrar - who is it?
In the market for the circulation of securities, there is another important type of activity - this is their registration. It is maintained by specific enterprises that enter into a contract with issuers and maintain a special register.It carries out the processing and storage of data, as well as the collection of available information. Registrars can only be a legal entity that does not conclude any third-party agreements in which securities are traded.
So, the registrar has a specific task - the formation and maintenance of a register of holders of securities and issuers, as well as information on their issue accounts (when they were opened and closed) and others.
In addition, registrars make various reference materials to issuers and owners of securities, and provide them with consulting assistance.
List of securities purchasers
So, registrars keep a certain code. What is included in it?
The list of purchasers of securities shall indicate their holders on a specific date. They also indicate their account numbers, which are also one of the components of the registry. This is necessary to identify the owners, as well as to make some filters that reflect how much a particular object of securities and their total face value.
The issuer may conclude a registry maintenance contract with only one specific service provider, for which a certain fee is charged. The registrar, in turn, can provide registry maintenance services to a wide range of individuals.
Finally
Thus, issuers of a security are only those legal entities that issue money, securities. They also bear some responsibility established by law for posting and timely reporting. In other words, the issuer takes responsibility for the full period of the issue - from the time the securities are prepared before the issue, until the transfer of the results of the placement.
The issue is one of the means of economic development of the enterprise, its investment attractiveness. By issuing securities, the organization distributes certain rights to their recipients, and also sets itself the task of monitoring their compliance. The emission process will be justified only if there is demand. The formation of the demand for the organization’s securities is determined by its legal status, as well as the level of trust among the population.