A stock exchange is a financial institution that ensures the operation of the securities market by organising and controlling transactions involving the purchase and sale of bonds, stocks, derivatives, and other financial instruments.
The main functions of a stock exchange are:
• Intermediary activities between buyers and sellers of securities;
• Reflection of equilibrium exchange prices based on the ratio of supply and demand for financial instruments;
• Ensuring control over the execution of transactions and circulation of securities;
• Organisation of the securities listing procedure;
• Accumulation of temporarily available funds and their redistribution;
• Maintaining transparency and openness of exchange trading.
The stock exchange ensures publicity of the conducted trades by publishing the quotations of securities, the results of trading sessions, and the time of the conducted trades. The exchange also has the right to determine the amount and procedure for collecting fees, charges and other payments from traders for services rendered, as well as the amount and procedure for collecting fines for violation of the rules established by it.
The world’s largest stock exchanges in terms of capitalisation are NYSE, NASDAQ, Japan Exchange Group, Shanghai Stock Exchange, Euronext, etc.