Commercial Paper Market Law and Legal Definition

Commercial paper market is a market in which buyers and sellers negotiate the exchange of commercial paper. The sellers are usually the payees of drafts, checks, certificates of deposit, or notes. The buyers are third parties who pay immediate cash to the seller. In a commercial paper market, the purchase price is usually less than the face value of the instrument because a seller would rather have cash immediately rather than wait to collect from the obligor when the instrument becomes due.