A capital market is defined as a securities market, in which commercial enterprises and governmental authorities are able to increase long-term funds. In this sort of market moneys are generally put up for time periods of a year or more.  The capital market is comprised of such entities as the stock market and bonds market (equity and debt).  So as to shield brokers, dealers and financial investors from fraud and corruption, global financial regulatory authorities have been put in place to manage and supervise the capital markets in their respective jurisdictions. Examples of said financial governing bodies include the U.S. Office of the Comptroller of the Currency (O.C.C.) and the U.K. Financial Services Authority (F.S.A.).
Capital markets can be divided into two distinct categories: the primary and secondary markets. In the primary market, new stock and bonds are sold and traded through a process known as underwriting. This is the process through which financial institutions evaluate whether customers are eligible to receive the various products offered by said financial institutions.  In secondary markets, on the other hand, already existing securities are traded, mostly on a securities exchange.