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INTRO Unit 4,5, 6 - Coggle Diagram

- - - - Rulemaking and enforcement of regulations that govern securities (stocks, bonds, mutual funds ,etc.)
      - Investigations and legal actions: if fraud, insider trading, misrepresentation
      - Disclosure requirement: (financial statements 10K, 10Q)
- - - - Retail investors: individuals, often less experienced
      - Institutional investors: pension funds, mutual funds, insurers
      - Accredited Investors: institutional and wealthy retail investors
- - - - Characteristics: Functions like an auction, prices change everyday based on the supply and deman
      - Role of Designated market maker DMM: firm that maintains fair and orderly market
    - - Who operates in the OTC
        
        Firms: Market Makers (special kind of broke dealer) / each security can have several market makers competing for the best price / They hold inventory to sell to other market maker or broke dealers
        
        Institutions and individuals operate indirectly through these firms
      - Third Market
        
        Exchange Listed securities traded OTC: A stock that could be traded on an exchange (first market) is instead being traded off-exchange in the third market, through broker-dealers.
        
        Why? to avoid exchange fees, to do large block trades privately, want to trade after exchange hours
      - Characteristics: virtual version of the stock exchange / Trading unlisted securities