Introduction This chapter begins with a discussion of the broad concept of a market and financial markets. It then delves into the markets for shares (securities) and derivatives. The history and context of financial markets and the background to their regulation is traversed. Important protagonists in the financial markets are highlighted such as the market operators (the Australian Securities Exchange or ASX), intermediaries (such as stockbrokers), investors and the largest and most powerful of corporations – listed companies. The regulation of financial markets and financial services in chs 7 and 6CA of the Corporations Act is examined, beginning with the definitions of financial products (securities and derivatives) and the type of investor (retail or wholesale). The licensing and supervision of financial markets is then considered: first, the licensing of markets themselves and their supervision through a system of rules – the Market Integrity Rules, the Operating Rules, and the Listing Rules. These rules have evolved from private market relationships so there is a spectrum of legal design which applies. The chapter then examines the interplay between certain listing rules and ch 6CA which requires disclosure by listed companies of material information to the market. The chapter then discusses the obligations of financial advisers and dealers in securities and derivatives and scrutinises another licensing regime for the provision of financial services through the Australian Financial Services Licence. The legal incidents of the broker–client and financial adviser–client relationships are then pondered. The chapter then considers the regulation of market misconduct under pt 7.10 of the Corporations Act : first, by analysing the prohibition against insider trading, and second, the prohibition on other forms of market misconduct such as false trading, misleading and deceptive conduct and market manipulation. Finally, the chapter considers the public and private enforcement of the aforementioned obligations. Terminology and context The financial markets A financial market is a broad term that describes a market where financial products are bought and sold. In common usage, a ‘financial market’ describes a market where many types of financial products are traded such as currencies, bonds, swaps and debt securities. These financial products are traded in exchanges and over-the-counter markets. However, the focus in this chapter is upon exchange-traded products, particularly securities and derivatives. Our primary focus when discussing securities is shares. The terms ‘capital markets’ and ‘equity markets’ are often used to describe this type of trading.