Financial instruments are instruments used in various economic and financial contexts to represent rights or obligations with economic content. This section provides a general description of what a financial instrument is and its main characteristics.
Definition of a financial instrument
A financial instrument is any security or right that represents an economic value and can be traded on a market. Unlike physical assets, such as real estate or vehicles, financial instruments do not have a material presence but represent a property right or a debt.
In certain contexts, financial instruments may be represented by digital instruments, always in accordance with the applicable regulations and the specific documentation of each issuance.
Characteristics of financial instruments
Financial instruments may exhibit different characteristics depending on their nature, such as their potential negotiability, the associated economic conditions, and the applicable regulatory framework. These characteristics vary according to the type of instrument and do not imply any guarantee of results.
Types of financial instruments
There are different types of financial instruments depending on their nature and function:
1. Fixed-income financial instruments
Fixed-income instruments may provide for certain contractually defined economic conditions, the fulfilment of which depends on multiple factors and does not imply any guarantee of repayment or of the receipt of interest.
Examples:
Common examples of fixed-income instruments include bonds issued by public or private entities, depending on the applicable legal framework.
2. Equity financial instruments
Their return depends on market performance and is not guaranteed.
Examples:
Shares of companies
Investment funds
3. Financial derivatives
These are instruments whose value depends on another underlying asset, such as futures or financial options.
Operational information
The structure, conditions and functioning of each financial instrument are described in detail in the contractual documentation corresponding to each issuance.
Importance of regulated financial instruments
Financial regulation establishes certain information, conduct and organisational requirements for market participants. The application of this regulatory framework does not eliminate the risks associated with financial instruments.
The information contained in this section is for informational purposes only and does not constitute financial, legal or investment advice. Financial instruments may involve significant risks, including the possible total loss of the invested capital.