Why has the United States historically been a powerhouse of innovation? Much of the answer to that question lies in the pre-eminence of American capital markets. In a primer series from SIFMA Insights, we explain just why America’s capital markets are the deepest and most liquid in the world.

Capital markets recognize and drive capital to the best ideas and enterprises. As policymakers seek to understand the components of an environment that promotes innovation, we must also consider how capitalism and the free market system are catalysts for opportunity and dynamism.

• Capital markets are crucial to fueling the U.S. economy, funding more than 70% of economic activity in the country.
• Clients benefiting from healthy capital markets include investors, corporations and governments.
• Financial institutions serve a critical role in making capital markets function efficiently, acting as the intermediary in a multitude of transactions.

Go beyond the typical 101

The primer series from SIFMA Insights goes beyond a typical 101-level brief, breaking down important technical and regulatory nuances. By fostering an understanding of the marketplace, we set the scene to address complex issues arising in today’s markets.

Want to see primers on more topics? Sign up to receive new publications and contact us at [email protected]. For basic concepts and product overviews, view SIFMA’s Investor Guides on www.projectinvested.com.

This post was originally published on July 12, 2018; it was updated on November 9, 2021.

Market Structure Primers

• Global Capital Markets & Financial Institutions Primer

  Let's start at the beginning: what is the function of the capital markets? How is a financial institution structured? Why do capital markets matter? Dive in with Part I of our two-part foundation to the Insights Primer Series.

• Primary, Secondary & Post-Trade Markets Primer

  Where are securities created? Where are they traded among investors? Why is the last phase of the trade lifecycle known as the plumbing of the capital markets? Find out in Part II of our two-part foundation to the Insights Primer Series.

• Global Equity Markets Primer

  The U.S. cash equity markets are the largest in the world and continue to be among the deepest, most liquid and most efficient. This primer is a thorough comparison of equity markets across the globe, analyzing data on market size, formation, performance and costs, as well as markets in indexes.

• Electronic Trading Market Structure Primer

  Technology is now part of market DNA but defining electronic trading is not black and white. Here, we attempt to do so by providing an overview of the types of platforms and strategies utilizing a form of electronic trading.

• US Equity Capital Formation & Listings Exchanges Primer

  Initial public offerings (IPOs) are an important way for businesses to grow, innovate and better serve their customers. With record issuance under their belts, markets continue to help entrepreneurs bring new ideas and technologies to light.

• US Equity Market Structure Primer

  Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets.

• US Multi-Listed Options Market Structure Primer

  An option is a contract to buy or sell an underlying asset or security at a specified price on or before a given date.

• US ETF Market Structure Primer

  Exchange-traded funds (ETFs) are pooled investment vehicles that have experienced significant growth since 2000.

• US Fixed Income Market Structure Primer

  Fixed income markets are an integral component to economic growth, providing efficient, long term and cost effective funding.