Corporate and Municipal Securities

Corporate equities and bonds, commercial paper, and municipal bonds are traded on various established exchanges and on over-the-counter markets. The primary securities exchanges in the United States are the New York Stock Exchange, the American Stock Exchange, and the primary over-the-counter dealer market is the National Association of Securities Dealers Automated Quotations (NASDAQ).

The commercial paper market warrants special mention as it is an important source of short term funding for financial corporations and municipal governments. Commercial paper is a money market instrument issued by prime-rated non-financial and financial companies with maturities ranging from one to 270 days. Commercial paper is issued through dealer placements or direct placements with investors. Although commercial paper is a negotiable instrument, secondary market trading is limited. Disruption in the issuance of commercial paper can cause significant liquidity and credit concerns for issuers, many of whom are depository institutions and other financial companies, and depository institutions that provide issuing and paying agent services to issuers.


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