What is the Stock Exchange?
The Stock Exchange is a trading facility where companies put up their stocks. In this place, many companies participate in the trade of the shares, and the stocks are traded like a commodity. It has been said that almost every company has a trading division.
The main intention of the Stock Exchange is to enable traders to trade the stocks at a lower price. It is also used as a channel where shareholders can send the news about the present state of affairs to the management.
How Does it Work?
The Stock Exchange has its own clearing house which handles the transactions and processes of all the transactions of the Company. The trading and the stock industry are also carried out in accordance with the laws and regulations which were determined by the Law Commission.
The Stock Exchange is of two types; namely, the OTCBB or the Over-The-Counter Bulletin Board, and the NYSE or the New York Stock Exchange. The trading here can be done on a stock market, which is of the OTCBB or one of the Stock Exchange market that is an affiliate of the NYSE.
The offices for the Stock Exchange consist of an executive of the Business bureau, an auditor, a certified public accountant, a chartered accountant, and an accountant. All these people are appointed by the government and these offices are responsible for carrying out all the activities of the Stock Exchange. They ensure that all the rules are being followed, and that the rules are being followed properly.
The main task of the exchange officials is to maintain the records. The chartered accountants and auditors are responsible for the accounts and they have to monitor all the transactions and their performance. The certified public accountants are responsible for conducting the audits, and they also ensure that the trading is conducted properly.
It is always seen that the most important feature of the Stock Exchange is that it is the place where all the investors can come and see the business. There are a lot of people who come here every day and the trading is carried out with great confidence. This is the reason that they make decisions about the trading and they also make decisions regarding the financial matters.
The Stock Exchange has also developed as a medium for the investors to deal with other investors in the stock market. They can use the facilities provided by the Stock Exchange to carry out their business transactions. The investors use the services of the brokers in order to get themselves connected with other investors.
The people who trade on the Stock Exchange are also called stockbrokers and the trading on the Stock Exchange is carried out through the services of the brokers. A broker is not an employee of the Exchange, but he is an employee of a brokerage firm.
The communication of the traders and the stockbrokers on the Stock Exchange is facilitated by the clearing house, the broker and the trading firm. This communication is done through the commercial and electronic messages, which are sent via the Telephone Network. The commercial messages are sent to the brokers and the commercial messages are also sent to the Stock Exchange and the other trading firms.
In case the messages are sent using the Broadcast Systems, then it is also transmitted to the exchanges, banks and financial institutions that are linked to the Exchange. The communications in the Stock Exchange is also made easier by the introduction of the stock computer system.
The banks in the United States are the ones who run the Stock Exchange. The prime duty of the banks is to sell and buy the shares. As the shares are of different values, these banks are supposed to pay different prices for the shares.