Issuer

An issuer is any company that issues its securities, monetary symbols, and other financial assets to attract additional capital.

In simple terms, an issuer is any company that is represented on the stock market. Any business can be an issuer, issuing their securities (stocks or bonds) that anyone can buy.

The issuers can be:

• banks - when they issue credit and debit cards;
• the government - only the government has the right to issue money;
• municipal authorities - when they sell bonds to compensate for budget deficits.

The activity of issuing securities is called an issuance. Issuance includes two functions - the right to issue securities and the obligation to secure the rights attached to the issued securities.

Issuers are the most important players in the investment market. They can be legal entities (commercial and non-commercial), state and municipal institutions. This term is most often referred to companies, which place issued securities on stock exchanges.

The most common types of issued securities are shares (ordinary and privileged) and debt securities (bonds). Shares are issued in order to raise shareholders' capital. Money loans are attracted by issuing debt securities.

Types of Issuers, their rights and obligations

An issuer of securities can be practically any legal entity (including a foreign one), regardless of the ownership type, which has its own rights and obligations.

A foreign issuer is an organization that issues securities to develop and finance its own activities, located in the jurisdiction of a foreign country.

The issuer has the right to issue securities, the ability to operate in the financial markets and receive profits, the right to operate in accordance with the laws of the state.

The issuer must regularly provide information on its business activities. After the issuance of securities, the issuer is required to control the sales and the legality of transactions, to meet the stipulated conditions while purchasing the securities.

Depending on the ownership type and field of activity, issuers are classified by territorial location, industries, investment attractiveness and other indicators. Issuers of securities mainly include banks, companies of oil and gas, metallurgical and energy industries.

Risks of Issuers

The risk of the issuer is connected to the inability to fulfill the undertaken financial obligations. For example, in the case of stocks, there is a risk of a price drop or complete collapse, as well as the bankruptcy of the issuer. If we consider bonds, there is a risk of refusal to pay interest (coupon income) or the risk of inability to repay debt securities (default).