The Capital Markets now has fundamental importance within the whole development process of the world economy. It is in principle a realization of dynamic transaction environment, a system that distributes the securities to provide liquidity to securities issued by companies, enabling the capitalization process these. Companies have sought to meet its financing needs for its activities increasingly through the issuance of securities in the capital market and less and less, the loans from the banks, which in some cases may cost more high.
The pursuit of profit, the emergence of the major economic groups, consumerism, unfavorable market conditions, among others, may cause an imbalance in the relationship between suppliers, consumers, and investors. Here appears one of the issues that will be the object of study: may be used by investors in the capital market, the same protection mechanisms for consumers? These two institutes can be treated?
Speculation, illegitimate and illegal, Capital Markets may cause serious damage to investors. The high and low in the price of securities can result in high profits to speculators, especially those holding privileged information and, on the other hand, will cause severe losses to investors.
Insiders, as these speculators are called, draw on information not yet disclosed to the market to obtain illicit gains. Such situations need to be inhibited through the use of various mechanisms to maintain the credibility and transparency of the capital market. Companies that offer and negotiate their securities in the capital market must continually be 16 concerned with transparency, with the provision of information and disclosure of relevant facts, making them widely known to investors.
The Capital Market is a major source of application of financial resources, is also critical to the development of enterprises, and consequently across the country, as it promotes the financing of companies, providing capital to cover its investments. The businesses that offer and trade their shares in the capital market must always be concerned about transparency, provide information to the market and disclose the relevant facts. The high and low in the price of securities, which are normal when it comes to the smooth functioning of capital markets, can lead to undue and high profits to those who hold privileged information not yet disclosed to the market (insiders), creating with it, serious damage to investors.
It is essential to grant protection in a contractual relationship where there is an imbalance of power between the participants.
The investor, when you use the securities it has saved and applied them in the capital market, is acquiring goods and services in this market: is learning securities and using the service offered by the intermediaries: the management of their investments. So this investor, acting in a unprofessionally market rather than being institutional investors, should be equated to the consumer. Can the investor seek compensation for damage suffered, due to the improper handling of the Capital Market conditions? However, the protection of investors is not intended to eliminate the natural hazards of the Capital Market or to ensure profitability, or provide favorable economic results. The Capital Markets must also be based on Ethical values.
Would you like to read more about this topic? This book might interest you: Capital Markets.