Financial markets are usually categorized on the basis of the characteristics of the participants involved and the types of securities sold. A secondary market is a type of capital market where securities are sold and traded from time to time. It is the market that buys new securities that can not be sold at any other place thus creating a secondary market.

It is also known as "New Issue Market" or NIM. Usually large organizations, companies, government or public sector institutions issue securities in order to raise capital. These organizations obtain funding through the sale of a new stock or bond issue. These organizations issue new stock or bonds with the help of a syndicate of securities dealers. These underwriting groups usually consists of investment banks, these banks set a beginning price range for a given security and then oversee its sale directly to investors.  

When these securities dealer take the responsibility of selling the stock or bonds of an organization to the investors in the financial markets, this process is called underwriting. This issuance of new stock is called "Initial Public Offering" or IPO. The dealers charge commission for selling the securities into the market.