What are the different functions of the stock exchange?

the different functions of the stock exchange


The stock exchange holds great importance in the capital market. It provides a protected place for the trading of shares in a systematic method. There are some rules and regulations are made for buying or selling securities in a well-structured manner. Here the securities that are mentioned involve a public company’s debenture and shares which are listed in a stock exchange. The issuing of bonds and debenture process is done by the government body, municipal, and public bodies.

The trading of bonds processed under over-the-counter but some of the corporate bonds sell into a stock exchange. They have a right to apply rules and regulations on the companies and brokers that are associated with them. In simple terms, we can say that the stock exchange is a medium in which the trading of securities like shares and bonds take place. They allowed both online and offline trading by going to their physical location. To know more about the stock exchange and the latest information about the company’s shares you can go https://www.dailyreckoning.com.au/ web address. There are many functions performed by a stock exchange, some of these are:

1. Economic barometer: For measuring the economic condition of the country, the stock exchange plays a role of a barometer. The shares prices are reflected in a big change in the country and its economic condition. It also helps in knowing the economy of a state and records all the small and big changes in the price of shares.

2. Evaluation of securities: On the basis of supply and demand, the stock market helps in evaluating securities. The value of that security is higher than that has a profitable and growth-oriented company offer. It helps in the execution of a proper function to the creditors, investors, and government.

3. Helps in economic growth: The stock exchange is the right place for the trading of securities of a large number of companies. It helps in making capital creation and economic growth by non-stop disinvestment and re-investment trading.

4. Security of transactions: The stock market only allows those securities for trading who are listed. The exchange authority involves the name of the companies that are verified. The companies have to follow the strict rules and regulations of trading to ensure safety.

5. Equity cult spread: The stock exchange inspires the people by educating them about the investment in ownership securities.

6. Provide scope for speculation: The stock exchange allows well conjecture of securities to ensure the supply of liquidity and demand security.

Conclusion: Stock exchange plays the important role in the economy of a country. It performs many functions for the stock market. It is said that the stock exchange is a subset of the stock market that provides a platform for the trading of shares.

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