What Is Stock Exchange? Pregnant Definitions In Addition To Features

What is Stock Exchange? Meaning

Stock Exchange (also called Stock Market or Share Market) is i of import element of capital market. Stock Exchange is an organized marketplace position for the purchase together with sale of industrial together with fiscal security. It is convenient house where trading inwards securities is conducted inwards systematic trend i.e. every bit per for certain rules together with regulations.

It performs diverse functions together with offers useful services to investors together with borrowing companies. It is an investment intermediary together with facilitates economical together with industrial evolution of a country.

Image Credits © Niyantha

Stock telephone commutation is an organized marketplace position for buying together with selling corporate together with other securities. Here, securities are purchased together with sold out every bit per for certain well-defined rules together with regulations. It provides a convenient together with secured machinery or platform for transactions inwards dissimilar securities. Such securities include shares together with debentures issued past times populace companies which are duly listed at the stock exchange, together with bonds together with debentures issued past times government, populace corporations together with municipal together with port trust bodies.

Stock exchanges are indispensable for the smoothen together with orderly performance of corporate sector inwards a complimentary marketplace position economy. Influenza A virus subtype H5N1 stock telephone commutation ask non last treated every bit a house for speculation or a gambling den. It should human activity every bit a house for prophylactic together with profitable investment, for this, effective command on the working of stock telephone commutation is necessary. This volition avoid misuse of this platform for excessive speculation, scams together with other undesirable together with anti-social activities.

London stock exchange (LSE) is the oldest stock telephone commutation inwards the world. While Bombay stock exchange (BSE) is the oldest inwards India. Similar Stock exchanges be together with operate inwards large bulk of countries of the world.

Definitions of Stock Exchange

According to Husband together with Dockerary,

"Stock exchanges are privately organized markets which are used to facilitate trading inwards securities."

The Indian Securities Contracts (Regulation) Act of 1956, defines Stock Exchange as,

"An association, organization or trunk of individuals, whether incorporated or not, established for the purpose of assisting, regulating together with controlling delineate of piece of occupation concern inwards buying, selling together with dealing inwards securities."

Features of Stock Exchange

Characteristics or features of stock telephone commutation are:-

1. Market for securities : Stock telephone commutation is a market, where securities of corporate bodies, regime together with semi-government bodies are bought together with sold.
2. Deals inwards minute paw securities : It deals amongst shares, debentures bonds together with such securities already issued past times the companies. In curt it deals amongst existing or minute paw securities together with therefore it is called secondary market.
3. Regulates merchandise inwards securities : Stock telephone commutation does non purchase or sell whatsoever securities on its ain account. It but provides the necessary infrastructure together with facilities for merchandise inwards securities to its members together with brokers who merchandise inwards securities. It regulates the merchandise activities so every bit to ensure complimentary together with fair trade
4. Allows dealings solely inwards listed securities : In fact, stock exchanges keep an official listing of securities that could last purchased together with sold on its floor. Securities which create non figure inwards the official listing of stock telephone commutation are called unlisted securities. Such unlisted securities cannot last traded inwards the stock exchange.
5. Transactions effected solely through members : All the transactions inwards securities at the stock telephone commutation are effected solely through its authorised brokers together with members. Outsiders or straight investors are non allowed to move into inwards the trading circles of the stock exchange. Investors convey to purchase or sell the securities at the stock telephone commutation through the authorised brokers only.
6. Association of persons : Influenza A virus subtype H5N1 stock telephone commutation is an association of persons or trunk of individuals which may last registered or unregistered.
7. Recognition from Central Government : Stock telephone commutation is an organised market. It requires recognition from the Central Government.
8. Working every bit per rules : Buying together with selling transactions inwards securities at the stock telephone commutation are governed past times the rules together with regulations of stock telephone commutation every bit good every bit SEBI Guidelines. No departure from the rules together with guidelines is allowed inwards whatsoever case.
9. Specific location : Stock telephone commutation is a detail marketplace position house where authorised brokers come upwards together daily (i.e. on working days) on the flooring of marketplace position called trading circles together with acquit trading activities. The prices of dissimilar securities traded are shown on electronic boards. After the working hours marketplace position is closed. All the working of stock exchanges is conducted together with controlled through computers together with electronic system.
10. Financial Barometers : Stock exchanges are the fiscal barometers together with evolution indicators of national economic scheme of the country. Industrial increase together with stability is reflected inwards the index of stock exchange.

Articles on Stock Exchange

Read to a greater extent than related articles on stock exchange:-

1. Functions of stock exchange.
2. Services of stock exchange.
3. Stock telephone commutation transactions terms.
4. Various stock exchanges inwards India.
5. Role of stock exchanges inwards working capital alphabetic lineament market.
6. Role functions of SEBI inwards monitoring stock exchange.