What is Stock Exchange? | Features of Stock Exchange

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Hi friends, in today’s article we are going to know about stock exchange and also know the features of stock exchange. So let’s discuss in details.

What is Stock Exchange?

Stock exchange or stock market or share market is one of the important components or constituent of capital market. Stock exchange is an organized marketplace for the purchases or sale of financial and industrial securities.

It is convenient place wherein trading in securities is carried out in systematic way that is as per positive or certain rules and regulations.

The Indian Contracts (Regulation) Act of 1956, defines stock exchange as, ‘An association, organization or body of individuals, whether incorporated or not established for the purpose of assisting, regulating and controlling in buying, selling and dealing in securities’.

Features of Stock Exchange

The features of stock exchange or the characteristics of stock exchange are given in the following ground-

Market for Securities – Stock exchange is a marketplace wherein securities of company bodies, government and semi government bodies are sold and bought.

Deals in second hand Securities – It offers or deals with shares, bonds, debentures and such securities already issued through the companies. In quick it offers or deals with current or second hand securities and therefore it is known as secondary market.

Association of Persons – A stock change is an affiliation of persons or frame of people which can be registered or unregistered.

Regulates trade in Securities – Stock exchange does now no longer purchase or sell any securities on its personal account. It only regulates the trade activities so as to ensure free and fair trade.

Recognition from Central Government – Stock exchange is a prepared or an organized market. It requires popularity or recognition from the Central Government.

Working as per Rules – Buying and selling transactions in securities on the inventory or stock exchange are governed with the aid of using the rules and policies of stock exchange in addition to SEBI or Securities and Exchange Board of India suggestions or guidelines. No deviation from the rules and suggestions is allowed in any case.

Financial Barometers – Stock exchange are the financial barometers and development indicators of national economy of the country. Industrial boom and stability is contemplated withinside the index of stock exchange.


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Hi, this is Eusub Ali Khan, Author & Owner of KhanStudy.in. I am a Content Writer, blogger and professional web-designer. I love to share my educational knowledge with people.

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