An exchange is a market in which goods, currency, securities are traded, each of these objects of trading is called an exchange commodity. The exchange differs from the usual market in the volume of transactions and the fact that the exchange commodities themselves are not represented on it - the participants in transactions operate only with quantitative and qualitative parameters of this or that exchange commodity that has a standard description and predetermined sizes of the minimum batch.
How does the exchange work
Exchange trading allows you to sell large batches of exchange commodities in the shortest possible time and at the best price that exists at the moment. It is clear that a person from the street cannot come to the stock exchange and start selling or buying. Only members of one or another exchange can be participants in exchange trading. These people, in fact, carry out stock exchange activities. The status of a member of the exchange, which determines the opportunity to participate in the work of the elected bodies of the management of the exchange, to gain access to commercial information or to advertise in specialized exchange publications, is determined by the form of membership. It can be permanent, temporary, daytime. Permanent members of the exchange have the broadest powers and opportunities.
Persons engaged in exchange activities are:
- dealers - individuals and organizations that represent only themselves on the exchange and carry out operations at their own peril and risk;
- brokers - professionals who mediate for a commission;
- exchange analysts and consultants;
- brokers - exchange players who speculate on the difference in rates and prices of securities or commodities;
- organizers of trading, administering the work of a particular exchange;
- Exchange managers who are responsible for compliance with the rules and laws governing exchange activities;
- technical employees who ensure its functioning.
How exchange activities are regulated
The internal and external regulation of its activities allows to streamline the work of the exchange. Internal regulation is carried out with the help of normative acts developed by the members of the exchange, its charter, operating rules and other internal documents governing the activities of this exchange and its divisions.
External regulation of exchange activities is carried out with the help of regulations of the state or other organizations authorized by the company for these actions, as well as international agreements.
Regulation of exchange activities is carried out to maintain order in the exchange market and ensure normal conditions for the work of all its participants. It is necessary to protect market participants from unfair or fraudulent actions of other members of the exchange and to ensure free and objective pricing that meets the realities of the current moment and the market situation. All this makes it possible to increase the efficiency of the market and stimulate entrepreneurial activity, and to adequately reward the risks assumed by the bidders.
