The capital market is the set of markets in which companies and public administrations obtain medium- and long-term financing by issuing securities, shares and debt, which investors then buy and trade. For a company it is the alternative to bank financing: investor money in exchange for negotiable securities, with disclosure and supervision rules.
Primary market and secondary market
In the primary market the company issues new securities and receives the money: a capital increase, an IPO, a bond placement. It is the only moment in which financing enters the company's cash.
In the secondary market those securities change hands between investors and the company no longer receives anything. Even so, the secondary market conditions the issuer in two ways: it provides liquidity to the investor, and without the expectation of liquidity the primary market becomes more expensive or is simply not covered; and it forms the price, which will be the valuation reference for the next capital increase or issuance. Whoever plans a capital raise has to think about both markets at the same time, even though only the first brings it funds.
Who participates
On the supply side of securities are the issuers: companies and public administrations. On the demand side, institutional investors (funds, insurers, pension plans) and retail investors. Between them operate the intermediaries that structure and place the issuances (investment banks, securities firms and agencies), the trading venues (regulated markets such as the Stock Exchange and multilateral systems such as BME Growth or MARF) and the infrastructure that records and settles transactions. Watching over the whole are the CNMV in Spain and ESMA at European level.
Access routes for a mid-sized company
A large listed company has the path already made. The practical question is what a mid-sized company seeking amounts of between a few million and a few tens of millions can do. Today it has four routes:
| Route | What is issued | Who it makes sense for | Indicative requirements |
|---|---|---|---|
| Stock exchange (regulated market) | Shares | Large companies, with a track record and listed company structure | Full prospectus approved by the CNMV, corporate governance, periodic reporting |
| BME Growth and BME Scaleup | Shares | Growth companies that want to list with limited costs | Lower admission and reporting requirements than on the Stock Exchange, with a registered adviser |
| Debt (bonds and promissory notes, MARF) | Debt | Companies with stable cash flows that do not want to dilute capital | Issuance documentation and analysis or rating depending on the market |
| Tokenized issuance (STO) | Shares or debt represented on a distributed ledger | Mid-sized amounts and direct placement to identified investors | Registration through an ERIR; prospectus or exemption depending on the amount |
The first two routes are the classic equity routes; the difference between them lies in the entry threshold and the maintenance cost, covered in the BME Scaleup fact sheet. The third avoids dilution in exchange for a payment commitment. The fourth is the most recent: Ley 6/2023 allows securities to be represented in systems based on distributed ledger technology, with registration by an ERIR (article 8 of the law, developed by Real Decreto 814/2023). How it works applied to fixed income is in the guide to tokenization of debt and bonds in Spain.
Two regulatory notes that change the numbers of a mid-sized issuance. From 5 June 2026, with the Listing Act, offers of up to 12 million euros can use the prospectus exemption of the Prospectus Regulation (EU) 2017/1129, which reduces the documentation cost of the transaction. And for the subsequent trading of tokenized securities, there is the DLT Pilot Regime (EU) 2022/858, which enables market infrastructures based on distributed ledger.
How to choose the route
There is no better route in the abstract; there is a route that fits four variables: the amount sought, the total cost (advisors, documentation, placement fees and annual maintenance), the time until funds are received, and the dilution that the current shareholder is willing to accept. A fifth, less visible variable is what liquidity the type of investor being targeted expects: a fund entering for five years does not require the same as a retail investor.
The detailed comparisons are already done: IPO vs STO for those unsure between traditional listing and tokenized issuance, and tokenized equity vs capital increase for those starting from a classic capital increase. If the transaction requires a prospectus, its content and timelines are in the fact sheet for the CNMV prospectus.
Is your company considering how to raise capital outside the banking system? Take the issuance diagnostic (2 min) or request a proposal. If you prefer to start by reading, download the 2026 guide.
This content is informative and educational. It does not constitute legal, tax, or investment advice. Check the current version of each regulation in the BOE and on EUR-Lex.
HokenFi is a software and infrastructure provider; it does not provide regulated services (CASP, ESI, EAF, or ERIR). This article is informative and does not constitute financial or legal advice.
Frequently asked questions
What is the difference between the capital market and the money market?
Time horizon. The money market trades short-term instruments, usually up to one year, such as treasury bills or promissory notes, and is used to manage liquidity. The capital market trades shares and debt at medium and long term, and is used to finance investment and growth. A company seeking stable capital to grow turns to the latter.
What are the primary and secondary markets?
The primary market is the issuance market: the company creates new securities and receives the money from the investors who subscribe to them. The secondary market is the trading market: those securities change hands between investors without the company receiving funds. The secondary market provides liquidity and forms the price that will serve as a reference in future issuances.
Can a mid-sized company access the capital market without going public?
Yes. It can join multilateral trading systems such as BME Growth or BME Scaleup, issue debt on markets such as MARF, or issue tokenized securities under Ley 6/2023, with registration through an ERIR. In addition, from 5 June 2026, offers of up to 12 million euros can use the prospectus exemption, which lowers the cost of the transaction.
