Equity Capital Market - ECM

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What is an 'Equity Capital Market - ECM'

An equity capital market (ECM) is a market that exists between companies and financial institutions that is used to raise equity capital for the companies. Some activities that companies operate in the equity capital markets include: overall marketing, distribution and allocation of new issues; initial public offerings, special warrants, and private placements. Along with stocks, the equity capital markets deal with derivative instruments such as futures, options and swaps.

BREAKING DOWN 'Equity Capital Market - ECM'

Equity capital markets are very dependent on the information provided by companies regarding their current financial situations and estimates of future performance. Equity capital market teams from different investments banks are responsible for helping companies execute primary market transactions by managing the structure, syndication, marketing and distribution.

The major players within the ECMs are large financial institutions such Goldman Sachs, Citigroup and UBS.

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