The key players on the capital market are capital seekers (companies or the government), who wish to finance investment projects and issue securities for this purpose, as well as capital providers (investors), who want to invest their money profitably and therefore purchase these securities. The stock exchange organizes the market under legal supervision. Finally, the interaction between capital providers and capital seekers is facilitated by intermediaries who act as traders, advisors, and settlement agents.
Capital demanders
A major source of capital demand in the Austrian capital market is the public sector. The federal government finances a large portion of its public spending – such as investments in infrastructure – through the issuance of bonds. This also provides the federal government with the necessary funds to positively influence economic activity and employment in our economy. Banks raise large sums of money in the form of bonds to finance their own business activities (e.g. lending). Other important capital demanders are companies seeking to raise additional capital for investments by going public.
Capital suppliers
Capital suppliers in the capital market can be both retail investors and institutional investors. Institutional investors include insurance companies, investment companies, financial institutions, and other firms that invest the capital they manage for a profit.
The intermediaries
Between the capital suppliers and capital seekers are the intermediaries – brokers, dealers, advisors, and settlement agents. The main group of intermediaries consists of banks, whose securities specialists assist investors in making investment decisions. They are responsible for providing advice and facilitating trading.
Legislative and supervisory institutions
The legal framework for capital market participants is established by national regulations (in particular laws and ordinances, but also voluntary codes of conduct such as the Corporate Governance Code) and, on the other hand, by regulations at the international level, particularly European Union law. The Ministry of Finance participates in shaping this framework through draft legislation and regulations. The Financial Market Authority (FMA) oversees activities in the capital market.
