A stock exchange is an organized market where securities are purchased and sold. In a stock exchange, transactions take place between the members or their authorized agents on behalf of the inventors. The following are the distinctive features of the stock exchange.
Features of the stock exchange
- Securities are the trade in a stock exchange is a systematic manner for investment and speculation.
- Securities refer to shares, stocks, debentures, and government bonds.
- Only listed securities are traded in a stock exchange.
- Securities issued by governments, public companies, and public utility concerns; public corporations, etc, are bought and sold on the floor of a stock exchange.
- It is usually established as a joint-stock company with limited liability.
- It is managed by the board of directors elected by the shareholders.
- It functions on the basis of certain rules and bylaws of the concerned stock exchange.
- It brings together a huge amount of capital necessary for the economic progress of a country.
Along the way, below I’m explaining you 4 major features of the stock exchange:
1. Organized Market: The stock exchange is not an orderly market. Every stock exchange has an administration committee, which has all the rights associated with the management and control of the transaction. All the transactions taking station in the stock exchange are done as per the prescribed procedure under the guidance of the management committee.
2. Dealings in Securities Delivered by Various Companies: Only those securities are purchased marketplace the stock exchange which is listed there. After filling certain terms and limitations, security gets placed on the stock exchange.
3. Dealing only with Authorized Members: Investors can sell and acquire securities in stock exchange only for the approved members. The stock exchange is a specified marketplace where only the authorized members can go. The investor has to get their help to sell and purchase.
4. Required to Serve the Rules and Bye-laws: While negotiating in the Stock Exchange, it is necessary to obey the laws and bye-laws defined by the Stock Exchange.
Related Content of Stock Exchange:
- What is the Definition of the Stock Exchange?
- Merits / Benefits / Advantages of Stock Exchange
- Difference between the Stock Exchange and General Market
- Services and Functions of Stock Exchange
- Causes of Price Fluctuation in Stock Exchange
- Trading Procedure in Stock Exchange
- Responsibility of Bangladesh Stock Exchange