The phrase "securities" is quite "talking". These are documents that have any value. These include: stocks, bills of exchange, checks, bonds, etc. Some market entities operate on the basis of business contracts (securities), which assume some obligations. Why are such documents necessary?
Securities guarantee the reliability of the economic system of society through mutual obligations between individuals and legal entities. They also participate in the payment turnover of the state. By purchasing securities, a person carries out the investment process. Such documents are a means of developing and restoring market-based methods of management.
The entire circulation of such documents forms the securities market, which stimulates the economic growth of the financial system, and also distributes investment resources. Such documents are not real capital, but they serve as a source of income.
Securities generate income for the owner. For example, a person has bonds. They usually do not function as capital, but nevertheless generate a regular income from interest. It is very important to correctly draw up a security, that is, its details must comply with all legislative norms.
Also, securities can be sold on the market. In some cases, they can be used as a payment instrument, for example, bills of exchange, checks.
Typically, securities can be different. For example, stocks. Their owner - a shareholder - has the right to receive a share of the profit of the organization. This type of income appeared in the 17th century. The first shares were issued in Holland. In Russia, emission securities were first used in the 19th century. It is the shareholders who purchase the securities that form the size of the authorized capital. All shares must be distributed among the founders. Thus, all owners receive monthly income from the profit of the organization, the amount of which depends on the percentage of the share.
Another type of security is a bond. Its holder has the right to receive income in the form of interest. After a certain time has elapsed, the owner is paid its face value.
Thus, securities act as a kind of means of a stable and sustainable investment process; they also centralize real capital.
