The stock exchange is a loan market, which is trading in securities - stocks, bonds, stocks, etc., often called the more general term "property titles," or just titles, as well as the trade payment instruments denominated in foreign currency mottos . Trade slogans often performed on special stock, called deviznoy or currency.
1. The functions performed STOCK EXCHANGES
The main role of the stock exchange is to serve the movement of money capital, which mediates the distribution and redistribution of national income as a whole in the national economy, and between social groups and sectors of the economy.
Stock Exchange performs the following functions: - the mobilization and concentration of temporarily free money savings, and savings through the sale of the securities exchange intermediaries in the primary and secondary stock markets, lending and financing of public and private sector by buying their securities in the primary market and resale in the secondary, as well as lending and financing speculators through trades in the secondary market - the concentration of transactions in securities, setting them on prices that reflect the level and ratio of supply and demand.
Under the primary market professionals understand the market, at which the first sale of securities issued (or new parties, such securities), and a secondary market in which trade is already traded securities.
2. SOME PRINCIPLES AND FEATURES OF THE ORGANIZATION AND FUNCTIONING OF THE STOCK EXCHANGES
Exchange stock quotes are important to the company, as a prerequisite for obtaining loans it provides a favorable picture of the stock performance of their shares (market rate, dividends, total return on stocks, etc.).
The movement of stock prices is influenced by many economic and political factors, which include: return (current and expected interest on the bonds, the expected amount of dividends and growth rates of shares) - the value of borrowing, which in turn depends on the size and money savings savings in the country, the level of business activity, the value of public debt and its shares, financed by issue of securities - investment risk, which affects stability, balance and prospects for economic growth, the reliability of the banking system, bond rate varies widely across the less than with stock price and depends on the ratio between the percentage established by the bonds, and middle-loan interest on this money market, and takes into account the conditions of the loan and the borrower's reliability.
Demand for the securities from investors (investors in securities) is formed on the basis of profitability, liquidity and risk-taking (the ability to quickly implement, that is monetizing) placing them in funds compared to other forms of investment.
Formation of the course, and also the rates published in table of exchange rates, called quotation. To a security quoted on the stock exchange, it should be allowed to quote the decision of the body of the stock exchange.
As quoted on the Stock Exchange at the same time a large number of shares and other securities whose prices are generally moving in different directions, to estimate the average price changes are applied generalize stock index, the most important of which is the Dow Jones index in the U.S..
Stock exchanges can be organized as a private joint-stock companies (UK, Japan, Austria) or as a public-legal institutions (Germany, France). In France, for example, stock exchanges are in fact government agencies and under the Ministry of Finance. In the U.S. stock exchanges are associations, and so the government can not control directly their activities. A special type of regulation of the organized stock market is used in Sweden, where the exchanges are joint stock companies, 50% owned by the government.
The principles of organization of the stock exchange stock exchange is a legal entity, and in matters of the device and the work she enjoys complete autonomy. Activity of the exchange is financed from contributions paid by the exchange, acquired in her "place", the annual contributions of enterprises listed on the stock exchange of its securities, fees from stock transactions and other payments to participants in the exchange and clients (eg, fees for issuing certificates, the registration of transactions, for the provision of advisory units exchange intermediary, information, legal and other services).
In addition to official stock exchange in a number of cities that are centers of stock trading, there are semi-or informal exchanges. In Germany, there are two types of such markets - the "adjustable" and unregulated "observation which, however, carry the official exchange.
Exchange members may be individuals or legal entities. The former includes individual securities traders (specialists in financial and investment issues that meet the qualification requirements of the Exchange). Legal entities are represented on the exchange specialized lending and financial institutions, comprising primarily highly specialized exchange-traded firms (brokerage firms and investment banks), as well as a universal commercial bank. All transactions on the stock exchange are carried out through its members.
The main features of the functioning of stock exchanges stock market Members are divided into two categories. Constitute one of the brokers (brokers) - intermediaries in transactions between buyers and sellers of securities, currencies and other financial assets, receive a fee for mediation (commission or brokerage, in accordance with the established percentages.) Fee based stockbrokers, depending on the size of the transaction.
Brokers appointed by the Exchange Committee. Making the intermediary transactions in securities, brokers acting on behalf and for account of customers. In some cases they may even trade for your account. Currently, the bulk of intermediation have major brokerage firms with large branch networks and have close links with banks.
Another group of stock exchange members are dealers (jobber, specialists) - individuals or firms, banks engaged in buying and selling securities. They act on their behalf and at his own expense. Dealers can only enter into transactions among themselves and with brokers. Brokering of dealers do not deal with and usually do not have the right to make deals directly with customers. Dealers profit generated by the difference between the rate of seller and buyer exchange rate, as well as due to changes in currency exchange rates and securities, that is, ultimately, the difference in the prices at which they buy and sell securities. The presence of jobbers in England and specialists in the U.S., having the right to make transactions only at its own expense, is a characteristic feature of the exchange systems of these countries.
Among the stockbrokers involved in securities transactions, allocate "Bears" and "bull". Speculators who play a fall ("Bears"), sold for a term of the securities, which have not yet, at the rate as recorded in the transaction, and hope that shortly before the end of the deal they can buy securities at a lower rate and sell them at a higher price fixed by the contract futures. Stockbrokers, playing on the increase ("bulls"), by contrast, buy securities for a period of waiting for the appreciation and hope to subsequently sell them profitable.
Compared with stock U.S. and British systems of other countries have some differences. For example, in Germany, members of stock exchanges are primarily foreign exchange brokers. The status - it's public servants, sworn, according to which they should not carry out operations at its own expense. In addition, they can not be co-owners, or members of any commercial firm. Foreign exchange brokers act as intermediaries in trading on the stock exchange - they carry the conclusion of trade deals with securities admitted to official trading, and fixed their exchange rate. Other participants in exchange trading in Germany are special representatives of the banks and so-called free (private) brokers, operating on the stock exchange itself. Bank representatives perform operations on behalf of and at the expense of the bank, which they represent, or act as commissioners in carrying out operations for clients. Only they transmit orders to the exchange on the purchase or sale of securities. Stock exchange banks and their agents, support personnel make up the majority of participants exchanges in Germany.
Free brokers are intermediaries in transactions with all types of securities publicly traded on the stock exchange, but do not install them at the same rate. They regularly publish the prices on the regulated and unregulated markets within its authority. Brokers only mediate between the parties exchange trading, and are not in contact with private investors. The German stock exchange are subject to supervision by the Land governments, which, however, have no right to interfere in the exchange process.
3. BASIC PRINCIPLES OF ORGANIZATION AND FUNCTIONING OF THE STOCK EXCHANGES IN CASE OF EXCHANGE OF SECURITIES IN FRANKFURT am Main
An example of the structure and organization of the stock market can serve as a securities exchange in Frankfurt am Main.
Guide Frankfurt Stock Exchange by the Board (the Board of Governors). Other bodies are the Office for admission to the stock exchange, the Committee for the admission, the Arbitration Court, the Committee of honor. Foreign exchange brokers constitute the House of Brokers, which is a public corporation.
The tasks of the Board include issues relating to the admission of enterprises and individuals to trade on the exchange, management of the organization and process of transactions, supervision of compliance with laws, regulations and conditions relating to exchange transactions, and maintaining order in the exchange, etc. The board consists of 22 members. Office of the admission shall decide on the admission of securities to official quotation.
The Chamber represents the interests of foreign exchange brokers foreign exchange brokers. In its management to oversee the brokers, the distribution of transactions between them (each broker has to "look after" a certain number of securities), observation of fixation rate and the official publication of the course bulletin. Official brokers are subject to rules issued in 1962 by the Minister of Hessen (responsible for oversight of the exchange), which regulate brokerage activities on the Frankfurt Stock Exchange.
Board admitted to trading on the Stock Exchange both businesses and individuals acting on their behalf and on behalf of individuals, among whom are two types - independent members and employees authorized to trade company, which may enter into transactions for the company.
Other participants in exchange trading in Germany are credit institutions and free brokers. Only banks pass on the stock exchange orders on the purchase or sale of securities. Foreign exchange brokers shall conclude commercial transactions with securities admitted to trading and record their course. Free brokers are intermediaries in deals with all kinds of securities publicly traded on the stock exchange, but do not install them at the same rate.
To finance the costs of the Frankfurt Stock Exchange established a number of fees that are paid for admission to stock exchange trading, and entering for the admission of securities to trade. For the separate use of the premises user pays due compensation in the contract. Importance in financing costs have also exchange earnings from the dissemination of information about the courses.
Legal basis of admission of securities to official stock exchange prescribed by law and ordinances of the governing procedure for admission to the exchange. The company, who wishes to obtain from the Board of admission to trading must comply with the following requirements: - it must declare its willingness to participate in trading in securities or foreign means of payment; - acting for the benefit of the enterprise entity should have the necessary reliability for stock trading and training - holding company of stock exchange transactions must be conducted in strict accordance with the established order - in cases where this is required by exchange rules, the company must submit a performance guarantee of their trades.
The main conditions for admission to official stock exchange trading in Germany are the following: - the total volume of shares admitted to quotation should be at least 0.5 million stamps at face value - the issuer of shares admitted to trading shall be operated as an enterprise is not less than 3 years - admitted to quote the shares must be widely spread among the public, in whose hands should be at least 25% selling shares at cost - application for admission of shares to be distributed to all shares of the same species, etc.
Application for admission to trading on a stock exchange is made with the bank. To this must be accompanied by a number of documents.
Conclusion of the admission of securities to the Exchange Company for the admission made by the Office. Once a decision can be published prospectus. Official quotation begins as a rule, within 3 months. The costs for the introduction of securities include: admission fee, the cost of publishing the statement and prospectus for admission, printing the publication of the annual report, the cost of an invitation to the general meeting and the announcement of dividends.
The meaning of admission procedures is to provide the necessary information to the public. Management is studying for the admission of the documents. The Issuer and the other applicants are responsible for the information submitted for publication in accordance with paragraph 45 of the Exchange.
Methods of quotations may be reduced to two basic ones: - the definition of a common medium of exchange rate on which can be carried out most of the data broker commissions (one course is considered the most representative and, therefore, is usually published in the press) - fixed rates, which were actually signed the deal ( In this case, or publish any change in rates, or just the extreme of their rejection, that is the highest and lowest prices at which transactions have actually been signed.)
On the markets are used as a limited and unlimited application. With limited pricing proposal in the order specified price, which can not exceed about a deal to buy and when to reduce the transaction for the sale. If the order was received unlimited, it means that the order will be executed depending on supply and demand in the market. When buying securities on the price of unlimited client indicates that the transaction should be completed by the lowest possible price. At the sale price for unlimited client indicates that the securities must be sold to the highest possible price.
Obligatory element of the application for stock transactions is an indication of the duration of its action. The possible options, such as "valid only for today", "valid until the end of the month." The application states Exchange, where the operation must be performed.
To 11 am at the Department of stock transactions of the bank are going to all orders received by the bank to perform transactions. Orders are put on the markets and types of securities. At this stage, the bank may itself be involved in the operation. If not, then the exchange agent, receiving customer orders, sent the stock market, where according to tradition, from 11.30 to 13.30 to trade securities, canned local television. Each of the official broker serves a group of stocks, so between them there can be no competition.
Immediately after the commencement of exchange free stock brokers and agents transmit orders to appropriate official brokers. Last initial application are entered in a special book. Applications for operations in a specific order depending on the complexity of transactions, for example, initially the most easily implemented by the transaction - the purchase of "the lowest possible price" and the sale of "the highest possible price." In the present conditions used for this purpose computers.
Approximately 1230 cease filing on share transactions, and 12.15 - deals with applications for bonds. Then begins the establishment of a single course. Along with securities that have a single course, there are securities with a variable rate. On the stock exchanges in Germany the share of such securities is about 20% of all shares listed there and in recent years has tended to increase.
Current quote is that during the exchange of the day always comes to the application of purchase and sale of securities, which leads to a change in official foreign exchange quotations.
Major stock exchanges of the world
New York 1023.2 turnover, mln USD
Tokyo 392.3
Mid-West (USA) 79.1
London 76.4
Osaka 68.1
Pacific (USA) 36.8
Toronto 31.7
U.S. 7.26
Amsterdam 20.0
Paris 08/19
Philadelphia 9.17
Boston 04.14
Stockholm 08.10
Montreal 07/05
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