Second-Tier Securities Market (SSM)

The Second-Tier Securities Market (SSM) is a specialized trading platform established to facilitate the buying and selling of securities. Unlike primary exchanges such as the NYSE (New York Stock Exchange) or NASDAQ (National Association of Securities Dealers Automated Quotations), the SSM caters to securities that don’t meet the stringent listing requirements of these major exchanges. Companies whose stocks do not qualify for listing on primary exchanges due to various reasons, such as size or financial performance, may find a home in the SSM.

• Shares and Debentures
• Public Corporations: Features, Merits and Demerits
• Liquidation and Merger

Features of Second-Tier Securities Market

1. Alternative Trading Platform: SSM serves as an alternative market for securities that don’t meet the criteria for listing on major exchanges. It provides a space for investors to trade these securities at market-determined prices.
2. Less Stringent Listing Requirements: Companies listed on the SSM typically have less stringent requirements compared to major exchanges. This can include aspects like minimum market capitalization, trading volume, or financial performance criteria.
3. Risk and Opportunity: Investing in SSM-listed securities may present both risks and opportunities. While they offer potential for growth and investment opportunities, they can also carry higher risks due to their less regulated nature and potentially lower liquidity compared to securities listed on major exchanges.

Advantages of Second-Tier Securities Market to Companies and the Investing Public

1. Alternative Capital Source: SSM provides companies that might not qualify for listing on primary exchanges an avenue to raise capital by issuing securities. This allows them to access funding and grow their operations.
2. Increased Accessibility: For the investing public, SSM offers an opportunity to invest in securities of companies that are not listed on major exchanges. This expands investment choices and diversification opportunities.
3. Enhanced Market Participation: It fosters competition among users in the securities market. It encourages innovation and provides more choices for investors.
4. Employment Opportunities: Companies gaining access to capital through the SSM can potentially expand their operations, contributing to job creation and economic growth.
5. Lower Entry Barrier: Individuals who might not meet the requirements to purchase securities on primary markets due to various limitations can participate in the SSM, thereby democratizing investment opportunities.
6. Cost Efficiency: Companies listing on the SSM might incur lower costs in terms of compliance and regulatory requirements compared to primary exchanges, potentially reducing the cost of capital.
7. Increased Liquidity: While not as liquid as major exchanges, the SSM still offers a platform for buying and selling securities, enhancing the liquidity of these assets compared to a private market scenario.