Study the case study below and answer the required question

Types of Financial Markets

There are several different types of markets. Each one focuses on the types and classes of instruments available on it$.$

Stock Markets

Perhaps the most ubiquitous of financial markets are stock markets. These are venues where companies list their

shares, which are bought and sold by traders and investors. Stock markets, or equities markets, are used by

companies to raise capital and by investors to search for returns.

Stocks may be traded on listed exchanges, such as the New York Stock Exchange $($NYSE$),$ Nasdaq, or the over$-$the$-$ counter

$($OTC$)$ market. Most stock trading is done via regulated exchanges, which plays an important economic role because it is

another way for money to flow through the economy.

Typical participants in a stock market include $($both retail and institutional$)$ investors, traders, market makers $($MMs$),$ and

specialists who maintain liquidity and provide two$-$sided markets. Brokers are third parties that facilitate trades between

buyers and sellers but who do not take an actual position in a stock.

Over$-$the$-$Counter Markets

An over$-$the$-$counter $($OTC$)$ market is a decentralized market$$meaning it does not have physical locations, and trading is

conducted electronically$$in which market participants trade securities directly $($meaning without a broker$).$ While OTC

markets may handle trading in certain stocks $($e$.$g$.,$ smaller or riskier companies that do not meet the listing criteria of

exchanges$),$ most stock trading is done via exchanges. Certain derivatives markets, however, are exclusively OTC,

making up an essential segment of the financial markets. Broadly speaking, OTC markets and the transactions that occur

in them are far less regulated, less liquid, and more opaque.

Required

Analyse and evaluate the types, functions and importance of financial markets in South Africa.