Rights and economic substance
A security establishes specified rights held by its owner. In an educational context, familiar examples include shares and bonds, but legal categories and record-keeping methods differ by jurisdiction. The instrument’s economic substance matters more than a broad label: an ownership interest and a debt claim create different sources of return and different risks.
Shares and bonds are not interchangeable
If an investor buys a share, the investor participates in the company’s equity. If the investor buys an ordinary bond, the investor expects the debt payments specified by its terms. The fact that both instruments are available in a broker’s app does not make them interchangeable or imply the same level of protection.
Form, trading and due diligence
A security need not exist as a paper certificate and need not be traded on an exchange. Ownership rights and transaction restrictions must be checked against current documents and the record-keeping infrastructure. The label “investment product” does not by itself explain the legal form. Before buying, identify the rights acquired, who must perform the obligation and the conditions under which losses may occur.