Jurisdiction(s):
United Kingdom

Key definition

Secondary market definition

What does Secondary market mean? Secondary market describes trading in existing securities (for example, shares and bonds) after their initial issue in the primary market. It covers on‑exchange and off‑exchange transactions between investors, including on‑book trades, block trades, issuer buy‑backs and off‑market transfers. The expression is descriptive rather than a defined legal term, but secondary trading is regulated. In England & Wales, Scotland and Northern Ireland, the framework includes FSMA 2000, UK MiFID II/MiFIR, the UK Market Abuse Regulation and market rules (such as the Listing Rules and AIM Rules). In Ireland, the equivalent EU regimes (MiFID II/MiFIR and MAR) and Euronext Dublin rules...

Secondary Trading of Distressed Debt: Market Players, Motivations, Benefits and Drawbacks, LMA/LSTA Transfer Options, Confidentiality/Lock-ups and EU NPL Rules

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Companies beginning to exhibit financial strain often find their borrowings changing hands on the Secondary market at prices below par or Face value. The size of this discount signals the market’s judgement on the chances of full repayment.

Original lenders of record, such as banks or loan originators, may wish to offload their exposure in the secondary market to:

deleverage balance sheets to meet regulatory demands or maximise shareholder value;
dispose of non-performing loans;
pare back exposure to a particular debtor or sector in line with strategic aims.

In complex restructurings, high levels of debt churn can frustrate talks with key creditors, as participants keep changing, producing a revolving door effect.

Key players

Typical secondary debt participants include hedge Funds, vulture funds, special situation funds, Private equity (PE) funds and pension funds. They trade in secured or unsecured debt, bank or bond debt, or trade claims...

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Web page updated on 21/05/2026

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