3. Financial services market infrastructure.

FSM – the system of markets where professional financial intermediaries provides services on financial assets.

Composition infrastructure:

- Professional participants (traders securities)

- Organizers of trade (exchanges and OTC equity trading system);

- Intermediaries in trade agreements (brokers and dealers);

- Intermediary financial institutions (commercial banks, non-bank depository institution, credit union, savings institutions, insurance companies, pension funds, money market funds, investment companies, investment funds);

- Registrars of securities;

- Depositories, clearing depository;

- Settlement and clearing banks;

- Self-regulatory organization of the securities market;

- Information and analytical institutions.

4. What does it mean “financial service”?

Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer finance companies, stock brokerages, investment funds, real estate funds and some government sponsored enterprises.

5. What does it mean “financial asset”?

A financial asset is an intangible asset that derives value because of a contractual claim. Examples include bank deposits, bonds, and stocks. Financial assets are usually more liquid than tangible assets, such as land or real estate, and are traded on financial markets. According to the International Financial Reporting Standards (IFRS), a financial asset is defined as one of the following: 1)Cash or cash equivalent; 2)Equity instruments of another entity; 3)Contractual right to receive cash or another financial asset from another entity or to exchange financial assets or financial liabilities with another entity

financial assets are classified into four broad categories :

1)Financial assets "held for trading" with evidence of short-term profit-taking, or are derivatives — are measured at fair value through profit or loss. 2)Financial assets with fixed or with determinable payments and fixed maturity 3)Financial assets with fixed or determinable payments which are not listed in an active market are considered to be "loans and receivables". Loans and receivables are also either measured at fair value through profit or loss by designation or determined to be financial assets available for sale by designation.

4)All other financial assets are categorized as financial assets "available for sale" and are measured at fair value through profit or loss by designation.

6.What does it mean “financial intermediaries”?

A financial intermediary is a financial institution that connects surplus and deficit agents. The classic example of a financial intermediary is a bank that consolidates deposits and uses the funds to transform them into loans.

Through the process of financial intermediation, certain assets or liabilities are transformed into different assets or liabilities. Financial intermediaries channel funds from people who have extra money or surplus savings (savers) to those who do not have enough money to carry out a desired activity (borrowers).A financial intermediary is typically an institution that facilitates the channeling of funds between lenders and borrowers. Lenders give funds to an intermediary institution (such as a bank), and that institution gives those funds to spenders (borrowers). This may be in the form of loans or mortgages. Alternatively, they may lend the money directly via the financial markets, which is known as financial disintermediation.

Advantages and disadvantages of financial intermediaries

There are two essential advantages from using financial intermediaries:

1. Cost advantage over direct lending/borrowing^{[citation needed]}

2. Market failure protection the conflicting needs of lenders and borrowers are reconciled, preventing^{[citation needed]} market failure

The cost advantages of using financial intermediaries include:

1. Reconciling conflicting preferences of lenders and borrowers

2. Risk aversion intermediaries help spread out and decrease the risks

3. Economies of scale using financial intermediaries reduces the costs of lending and borrowing

4. Economies of scope intermediaries concentrate on the demands of the lenders and borrowers and are able to enhance their products and services (use same inputs to produce different outputs)

Various disadvantages have also been noted in the context of climate finance and development finance institutions.^[7] These include a lack of transparency, inadequate attention to social and environmental concerns, and a failure to link directly to proven developmental impacts

Financial intermediaries include:

• Banks, Building societies, Credit unions, Financial advisers or brokers, Insurance companies, Collective investment schemes, Pension funds.