what about stock exchanges?

Stock exchanges play an active role in the capital formation of a nation. Stock exchange fosters the habit of saving, investing and risk-taking among the members of general public.

In this way, stock exchange helps in the process of capital formation.

As per stock exchange rules, all transactions on the exchange are required to be “recorded and made public”.

Besides, the market quotation helps the lender on the security of shares to assess the value of the security.

Stock exchanges work under set rules and regulations. This ensures safety of investable funds.

Thus the stock exchanges protect the interests of investors through the strict enforcement of rules and regulations.

In the absence of organised stock exchanges the innocent investors may easily be deceived at the hands of clever brokers dealing in securities.

Stock exchange serves as a dependable guide for the investors.

Regular dealings in stock exchange sifts the profitable investment from the risky ones.

Listing of securities is a very important function of stock exchange.

A stock exchange does not deal in the securities of all companies.

Listing of securities here means the inclusion of securities in the official list of a stock exchange for the purpose of trading.

Stock exchange provides full information regarding listed companies.

Stock exchange serves as a gauge-glass of the economic health of the concerned companies. It collects necessary information regarding non-listed companies also.

Stock exchanges facilitate genuine speculation. The genuine traders speculate and secure sizeable gains through fluctuations in securities’ prices.

In fact, speculation is an integral part of stock exchange functions.

The stock exchanges indirectly regulate the company management.

A company has to fulfill certain conditions before official listing of its securities.

The stock exchanges have to be regulated to ensure stability to protect investors from the activities.