Legal Definitions - public market

Public market refers to a place where securities of a public company are traded. Before a company can offer its securities in the public market, it must first conduct an initial public offering (IPO). This means that the company is selling its shares to the public for the first time. Once a company is listed on a public market, it must comply with the Exchange Act's periodic reporting requirements on an ongoing basis.

For example, the New YorkStock Exchange (NYSE) is a public market where companies can list their securities for trading. Companies can choose to sell their securities through private placements instead of issuing them in the public market.

Illustration: Imagine a company called XYZ wants to raise money by selling its shares to the public. It conducts an IPO and lists its shares on a public market like the NYSE. Now, anyone can buy and sell shares of XYZ on the NYSE. XYZ must also comply with the Exchange Act's reporting requirements, which means it must regularly provide information about its financial performance to the public.