1. Financial Advisory
2. Markets
3. Capital Markets
4. Primary Market

What is the Primary Market?

The primary market for any asset refers to the first time any security is offered for purchase by the public. This also signals that special filing will have been made with the SEC in the form of a prospectus (for US investors). The proceeds from any offer on the primary market go directly to the issuer (minus investment banking fees). In order to encourage the purchase of this asset rather than those similar that already exist, the issuer generally enhances the deal with a slightly lower price.

For securities, the first time they are offered is called an Initial Public Offering (IPO). Investors purchase the shares of an IPO without broker commission (a much bigger advantage way back when) and generally for a price that will give their shares some rise when they begin trading on their exchange (secondary market).

Bonds are newly issued through a dealer or group of dealers and incent their purchase by offering a slightly better interest rate than other bonds that already trade.