In international law, an issuer is a local government body, state structure or legal entity on behalf of which securities, payment cards or banknotes are issued in order to finance their own activities. Thus, a loan is made for business development, and the lender acquires certain rights.
Each state independently legislates which entities can act as issuers, and also regulates the features of the process of issuing securities.
Definition
According to the legislation of the Russian Federation, the issuer is a joint stock company. It may issue all types of shares, except those that are prohibited for circulation in the territory of the Russian Federation. Government bonds in the Russian Federation are forbidden to issue on issue. Thus, the main subjects of this process is the Ministry of Finance, which represents the authorities, leading credit and financial institutions, as well as legal entities that are joint-stock companies. All securities in the Russian Federation are subject to mandatory state registration. This allows for a higher level of guaranteeing the rights of investors.
However, in international practice, the issuer is not only a legal entity, but also an executive body or local government that issues securities, payment and credit cards, traveler’s checks, and banknotes to finance the development of its activities. In the stock market, they always act as sellers. A stock, like any other security, is a product that has a price.
Classification
Thus, summarizing international and domestic practice, we can say that the issuer is an entity that issues shares. But this is the simplest definition, which does not take into account the many possible reservations. Therefore, it is useful to consider the classification of issuers. Several features are distinguished, on the basis of which it is possible to distinguish groups of these subjects. For example, depending on the field of activity they are divided into:
- Banks
- Insurance organizations.
- Manufacturing enterprises.
- Entities engaged in trade.
- Investment organizations and funds.
Depending on the form of ownership, such issuers are distinguished as:
- The state represented by its specific bodies.
- Local government structures.
- Commercial firms.
It is possible to classify issuers according to the policies that they pursue. In this case, passive and active subjects are distinguished. There are also resident issuers and foreign joint-stock companies.
Issuer's rights
It must be understood that the activities of these entities are not limited to the issue of shares. The issuer is an organization that is engaged in any activity, and it needs money for development. After the sale of securities, this entity receives additional obligations. He must control the process of selling shares, and also provide investors with the conditions agreed upon during the purchase. As for the rights, the issuer acts on the market and exercises its functions in accordance with the law, and also makes a profit.
